Lumber Liquidators 2013 Annual Report Download - page 28

expenses in order to repair any such operational problems. 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.
The selection and implementation of information technology initiatives may impact our operational
efficiency and productivity.
In order to better manage our business, we expect to invest in our information systems. In doing so, we
must select the correct investments and implement them in an efficient manner. The costs, potential problems
and interruptions associated with implementing technology initiatives could disrupt or reduce the efficiency of
our operations. Furthermore, these initiatives might not provide the anticipated benefits or provide them in a
delayed or more costly manner. Accordingly, issues relating to our selection and implementation of
information technology initiatives may negatively impact our business and operating results.
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.
Further, the costs associated with such maintenance may exceed our estimations.
We may incur costs and losses resulting from security risks we face in connection with our electronic
processing, transmission and storage of confidential customer information.
We accept electronic payment cards for payment in our stores and through our call center. In addition,
our online operations depend upon the secure transmission of confidential information over public networks,
including information permitting cashless payments. As a result, we may become subject to claims for
purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information,
and we may also be subject to lawsuits or other proceedings relating to these types of incidents. Further, a
compromise of our security systems that results in our customers’ personal information being obtained by
unauthorized persons could adversely affect our reputation with our customers and others, as well as our
operations, results of operations and financial condition, and could result in litigation against us or the
imposition of penalties. A security breach could also require that we expend significant additional resources
related to the security of information systems and could result in a disruption of our operations, particularly
our online sales operations.
Additionally, privacy and information security laws and regulations change, and compliance with them
may result in cost increases due to necessary systems changes and the development of new administrative
processes. If we fail to comply with these laws and regulations or experience a data security breach, our
reputation could be damaged, possibly resulting in lost future business, and we could be subjected to
additional legal risk as a result of non-compliance.
Risks Related to Our Personnel
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.
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