Lumber Liquidators 2009 Annual Report Download - page 21

a timely basis. We may experience operational problems with our information systems as a result of system failures, viruses,
computer “hackers” or other causes. Any significant disruption or slowdown of our systems could cause information,
including data related to customer orders, to be lost or delayed, which could result in delays in the delivery of products to our
stores and customers or lost sales. Moreover, our entire corporate network, including our telephone lines, is on an Internet-
based network. Accordingly, if our network is disrupted, we may experience delayed communications within our operations
and between our customers and ourselves, and may not be able to communicate at all via our network, including via
telephones connected to our network.
Any disruption of our website or our call center could disrupt our business and lead to reduced net sales and reputational
damage.
Our website and our call center are integral parts of our integrated multi-channel strategy. Customers use our website
and our call center as information sources on the range of products available to them and to order our products, samples or
catalogs. Our website, in particular, is vulnerable to certain risks and uncertainties associated with the Internet, including
changes in required technology interfaces, website downtime and other technical failures, security breaches and consumer
privacy concerns. If we cannot successfully maintain our website and call center in good working order, it could reduce our
net sales and damage our reputation.
Failure to manage our growth effectively could harm our business and operating results.
Our plans call for a significant number of new stores, and increased orders from our website, call center and catalogs.
Our existing management information systems, including our store management systems and financial and management
controls, may be unable to support our expansion. Managing our growth effectively will require us to continue to enhance
these systems, procedures and controls and to hire, train and retain regional managers, store managers and store staff. We
may not respond quickly enough to the changing demands that our expansion will impose on our management, staff and
existing infrastructure. Any failure to manage our growth effectively could harm our business and operating results.
Our success depends substantially upon the continued retention of certain key personnel.
We believe that our success has depended and continues to depend to a significant extent on the efforts and abilities of
our senior management team. The loss, for any reason, of the services of any of these key individuals and any negative
market or industry perception arising from such loss, could damage our business and harm our reputation.
Our success depends upon our ability to attract, train and retain highly qualified managers and staff.
Our success depends in part on our ability to attract, hire, train and retain qualified managers and staff. Buying
hardwood flooring is an infrequent event, and typical consumers have very little knowledge of the range, characteristics and
suitability of the products available to them before starting the purchasing process. Therefore, consumers in the hardwood
flooring market expect to have sales associates serving them who are knowledgeable about the entire assortment of products
offered by the retailer and the process of choosing and installing hardwood flooring. As a result, competition for qualified
store managers and sales associates among flooring retailers is intense. We may not succeed in attracting and retaining the
personnel we require to conduct our current operations and support our potential future growth. In addition, as we expand
into new markets, we may find it more difficult to hire, motivate and retain qualified employees.
Increased competition could cause price declines, decrease demand for our products and decrease our market share.
We operate in the hardwood flooring industry, which is highly fragmented and competitive. We face significant
competition from multinational home improvement chains, national and regional flooring specialty chains, Internet-based
companies and privately-owned single-site enterprises. We compete on the basis of price, customer service, store location
and range, quality and availability of hardwood flooring we offer our customers. Our competitive position is also influenced
by the availability, quality and cost of merchandise, labor costs, finishing, distribution and sales efficiencies and our
productivity compared to that of our competitors. As we expand into new and unfamiliar markets, we may experience
different competitive conditions than in the past.
Some of our competitors are larger organizations, have existed longer, are more diversified in the products they offer
and have a more established market presence with substantially greater financial, marketing, personnel and other resources
than we have. In addition, our competitors may forecast market developments more accurately than we do, develop products
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