Lumber Liquidators 2015 Annual Report Download - page 24

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reduction in access to credit may impact our ability to offer customers credit card financing through third
party credit providers on terms similar to those offered previously, or at all. In addition, economic conditions,
including decreased access to credit, may result in financial difficulties leading to restructurings, bankruptcies,
liquidations and other unfavorable events for our customers, suppliers and other service providers. If such
conditions deteriorate, our industry, business and results of operations may be severely impacted.
The hardwood flooring industry depends on the economy, home remodeling activity, the homebuilding
industry and other important factors.
The hardwood flooring industry is highly dependent on the remodeling of existing homes and new home
construction. In turn, remodeling and new home construction depend on a number of factors which are beyond
our control, including interest rates, tax policy, employment levels, consumer confidence, credit availability,
real estate prices, demographic trends, weather conditions, natural disasters and general economic conditions.
For example, discretionary consumer spending could be limited, spending on remodeling of existing homes
could be reduced and purchases of new homes could decline if:
• the national economy or any regional or local economy where we operate weakens;
• interest rates rise;
• credit becomes less available;
• tax rates and health care costs increase;
• regions where we operate experience unfavorable demographic trends;
• fuel costs or utility expenses increase; or
• home prices depreciate.
In the event of a decrease in discretionary spending, home remodeling activity or new home construction,
demand for our products, including hardwood flooring, could be impacted negatively and our business and
operating results could be harmed.
Competition could cause price declines, decrease demand for our products and decrease our market share.
We operate in the wood flooring industry, which is highly fragmented and competitive. We face
significant competition from national and regional home improvement chains, national and regional specialty
flooring 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 the hardwood flooring that we
offer our customers. If our positioning with regard to one or more of these factors should erode, deteriorate,
fail to resonate with consumers or misalign with demand or expectations, our business and results may be
impacted negatively.
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.
Further, as we expand into new and unfamiliar markets, we may face different competitive environments than
in the past. Likewise, as we continue to enhance and develop our product offerings, we may experience new
competitive conditions.
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 that are superior to ours or produce similar
products at a lower cost, or adapt more quickly to new technologies or evolving customer requirements than
we do. Intense competitive pressures from one or more of our competitors could cause price declines,
decrease demand for our products and decrease our market share.
Hardwood flooring may become less popular as compared to other types of floor coverings in the future.
For example, our products are made using various hardwood species, including rare exotic hardwood species,
and concern over the environmental impact of tree harvesting could shift consumer preference towards
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