LensCrafters 2015 Annual Report Download - page 21

Management Report as of December 31, 2015 Page 17 of 35
8. RISK FACTORS
Our future operating results and financial condition may be affected by various factors, including those set forth below.
Risks Relating to Our Industry and General Economic Conditions
a) If current economic conditions deteriorate, demand for our products will be adversely impacted, access to credit
will be reduced and our customers and others with which we do business will suffer financial hardship. All of
these factors could reduce sales and in turn adversely impact our business, results of operations, financial
condition and cash flows.
Our operations and performance depend significantly on worldwide economic conditions. Uncertainty about global
economic conditions poses a risk to our business because consumers and businesses may postpone spending in response to
tighter credit markets, unemployment, negative financial news and/or declines in income or asset values, which could have
a material adverse effect on demand for our products and services. Discretionary spending is affected by many factors,
including general business conditions, inflation, interest rates, consumer debt levels, unemployment rates, availability of
consumer credit, conditions in the real estate and mortgage markets, currency exchange rates and other matters that
influence consumer confidence. Many of these factors are outside our control. Purchases of discretionary items could
decline during periods in which disposable income is lower or prices have increased in response to rising costs or in periods
of actual or perceived unfavorable economic conditions. If this occurs or if unfavorable economic conditions continue to
challenge the consumer environment, our business, results of operations, financial condition and cash flows could be
materially adversely affected.
In the event of financial turmoil affecting the banking system and financial markets, additional consolidation of the financial
services industry or significant failure of financial services institutions, there could be a tightening of the credit markets,
decreased liquidity and extreme volatility in fixed income, credit, currency and equity markets. In addition, the credit crisis
could continue to have material adverse effects on our business, including the inability of customers of our wholesale
distribution business to obtain credit to finance purchases of our products, restructurings, bankruptcies, liquidations and
other unfavorable events for our consumers, customers, vendors, suppliers, logistics providers, other service providers and
the financial institutions that are counterparties to our credit facilities and other derivative transactions. The likelihood that
such third parties will be unable to overcome such unfavorable financial difficulties may increase. If the third parties on
which we rely for goods and services or our wholesale customers are unable to overcome financial difficulties resulting
from the deterioration of worldwide economic conditions or if the counterparties to our credit facilities or our derivative
transactions do not perform their obligations as intended, our business, results of operations, financial condition and cash
flows could be materially adversely affected.
b) If our business suffers due to changing local conditions, our profitability and future growth may be affected.
We currently operate worldwide and have our operations in many countries, including certain developing countries in Asia,
South America and Africa. Therefore, we are subject to various risks inherent in conducting business internationally,
including the following: