LensCrafters 2013 Annual Report Download - page 25

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If vision correction alternatives to prescription eyeglasses become more widely available, or consumer preferences for such
alternatives increase, our profitability could suffer through a reduction of sales of our prescription eyewear products,
including lenses and accessories.
Our business could be negatively impacted by the availability and acceptance of vision correction alternatives to
prescription eyeglasses, such as contact lenses and refractive optical surgery.
Increased use of vision correction alternatives could result in decreased use of our prescription eyewear products,
including a reduction of sales of lenses and accessories sold in our retail outlets, which could have a material adverse impact
on our business, results of operations, financial condition and prospects.
Unforeseen or catastrophic losses not covered by insurance could materially adversely affect our results of operations and
financial condition.
For certain risks, we do not maintain insurance coverage because of cost and/or availability. Because we retain some
portion of our insurable risks, and in some cases self-insure completely, unforeseen or catastrophic losses in excess of insured
limits could materially adversely affect our results of operations and financial condition.
Risks Relating to Our Business and Operations
If we are unable to successfully introduce new products and develop and defend our brands, our future sales and operating
performance may suffer.
The mid- and premium-price categories of the prescription frame and sunglasses markets in which we compete are
particularly vulnerable to changes in fashion trends and consumer preferences. Our historical success is attributable, in part,
to our introduction of innovative products which are perceived to represent an improvement over products otherwise
available in the market and our ability to develop and defend our brands, especially our Ray-Ban and Oakley proprietary
brands. Our future success will depend on our continued ability to develop and introduce such innovative products and
continued success in building our brands. If we are unable to continue to do so, our future sales could decline, inventory
levels could rise, leading to additional costs for storage and potential write-downs relating to the value of excess inventory,
and there could be a negative impact on production costs since fixed costs would represent a larger portion of total production
costs due to the decline in quantities produced, which could materially adversely affect our results of operations.
If we are not successful in completing and integrating strategic acquisitions to expand or complement our business, our
future profitability and growth could be at risk.
As part of our growth strategy, we have made, and may continue to make, strategic business acquisitions to expand
or complement our business. Our acquisition activities, however, can be disrupted by overtures from competitors for the
targeted candidates, governmental regulation and rapid developments in our industry. We may face additional risks and
uncertainties following an acquisition, including (i) difficulty in integrating the newly acquired business and operations in an
efficient and effective manner, (ii) inability to achieve strategic objectives, cost savings and other benefits from the
acquisition, (iii) the lack of success by the acquired business in its markets, (iv) the loss of key employees of the acquired
business, (v) a decrease in the focus of senior management on our operations, (vi) difficulty integrating human resources
systems, operating systems, inventory management systems and assortment planning systems of the acquired business with
our systems, (vii) the cultural differences between our organization and that of the acquired business and (viii) liabilities that
were not known at the time of acquisition or the need to address tax or accounting issues.
If we fail to timely recognize or address these matters or to devote adequate resources to them, we may fail to
achieve our growth strategy or otherwise realize the intended benefits of any acquisition. Even if we are able to integrate our
business operations successfully, the integration may not result in the realization of the full benefits of synergies, cost
savings, innovation and operational efficiencies that may be possible from the integration or in the achievement of such
benefits within the forecasted period of time.