GameStop 2008 Annual Report Download - page 33

If our management information systems fail to perform or are inadequate, our ability to manage our
business could be disrupted.
We rely on computerized inventory and management systems to coordinate and manage the activities in our
distribution centers, as well as to communicate distribution information to the off-site, third-party operated
distribution centers with which we work. The third-party distribution centers pick up products from our suppliers,
repackage the products for each of our stores and ship those products to our stores by package carriers. We use
inventory replenishment systems to track sales and inventory. Our ability to rapidly process incoming shipments of
new release titles and deliver them to all of our stores, either that day or by the next morning, enables us to meet peak
demand and replenish stores at least twice a week, to keep our stores in stock at optimum levels and to move
inventory efficiently. If our inventory or management information systems fail to adequately perform these
functions, our business could be adversely affected. In addition, if operations in any of our distribution centers were
to shut down or be disrupted for a prolonged period of time or if these centers were unable to accommodate the
continued store growth in a particular region, our business could suffer.
We may engage in acquisitions which could negatively impact our business if we fail to successfully
complete and integrate them.
To enhance our efforts to grow and compete, we may engage in acquisitions. Our plans to pursue future
acquisitions are subject to our ability to identify potential acquisition candidates and negotiate favorable terms for
these acquisitions. Accordingly, we cannot assure you that future acquisitions will be completed. In addition, to
facilitate future acquisitions, we may take actions that could dilute the equity interests of our stockholders, increase
our debt or cause us to assume contingent liabilities, all of which may have a detrimental effect on the price of our
common stock. Finally, if any acquisitions are not successfully integrated with our business, our ongoing operations
could be adversely affected.
Litigation and litigation results could negatively impact our future financial condition and results of
operations.
In the ordinary course of our business, the Company is, from time to time, subject to various litigation and legal
proceedings. In the future, the costs or results of such legal proceedings, individually or in the aggregate, could have
a negative impact on the Company’s results of operations or financial condition.
Legislative actions may cause our general and administrative expenses or income tax expense to increase
and impact our future financial condition and results of operations.
In order to comply with laws adopted by the U.S. government or other regulatory bodies, we may be required to
increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory
services, all of which may cause our general and administrative costs or income tax expenses to increase. Changes in
the accounting rules could materially increase the expenses that we report under U.S. generally accepted accounting
principles (“GAAP”) and adversely affect our operating results.
Risks Relating to Our Indebtedness
To service our indebtedness, we will require a significant amount of cash, the availability of which
depends on many factors beyond our control.
Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and
operating performance, which is subject to prevailing economic and competitive conditions and to certain financial,
business and other factors beyond our control. These factors include:
• our reliance on suppliers and vendors for sufficient quantities of their products and new product releases and
our ability to obtain favorable terms from these suppliers and vendors;
• economic conditions affecting the electronic game industry, the retail industry and the banking and financial
services industry;
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