Macy's 2015 Annual Report Download - page 13

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8
The Company's sales and operating results could be adversely affected by product safety concerns.
If the Company's merchandise offerings do not meet applicable safety standards or our consumers' expectations
regarding safety, the Company could experience decreased sales, experience increased costs and/or be exposed to legal and
reputational risk. Events that give rise to actual, potential or perceived product safety concerns could expose the Company
to government enforcement action and/or private litigation. Reputational damage caused by real or perceived product
safety concerns could negatively affect the Company's business and results of operations.
The Company depends upon the success of its advertising and marketing programs.
The Company’s business depends on effective marketing and high customer traffic. The Company has many
initiatives in this area, and often changes its advertising and marketing programs. There can be no assurance as to the
Company’s continued ability to effectively execute its advertising and marketing programs, and any failure to do so could
negatively affect the Company’s business and results of operations.
Parties with whom the Company does business may be subject to insolvency risks or may otherwise become unable or
unwilling to perform their obligations to the Company.
The Company is a party to contracts, transactions and business relationships with various third parties, including,
without limitation, vendors, suppliers, service providers, lenders and participants in joint ventures, strategic alliances and
other joint commercial relationships, pursuant to which such third parties have performance, payment and other obligations
to the Company. In some cases, the Company depends upon such third parties to provide essential leaseholds, products,
services or other benefits, including with respect to store and distribution center locations, merchandise, advertising,
software development and support, logistics, other agreements for goods and services in order to operate the Company’s
business in the ordinary course, extensions of credit, credit card accounts and related receivables, and other vital matters.
Current economic, industry and market conditions could result in increased risks to the Company associated with the
potential financial distress or insolvency of such third parties. If any of these third parties were to become subject to
bankruptcy, receivership or similar proceedings, the rights and benefits of the Company in relation to its contracts,
transactions and business relationships with such third parties could be terminated, modified in a manner adverse to the
Company, or otherwise impaired. The Company cannot make any assurances that it would be able to arrange for alternate
or replacement contracts, transactions or business relationships on terms as favorable as the Company’s existing contracts,
transactions or business relationships, if at all. Any inability on the part of the Company to do so could negatively affect the
Company’s cash flows, financial condition and results of operations.
A material disruption in the Company’s computer systems could adversely affect the Company’s business or results of
operations.
The Company relies extensively on its computer systems to process transactions, summarize results and manage its
business. The Company’s computer systems are subject to damage or interruption from power outages, computer and
telecommunications failures, computer viruses, cyber-attack or other security breaches, catastrophic events such as fires,
floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by the Company’s employees. If the
Company’s computer systems are damaged or cease to function properly, the Company may have to make a significant
investment to fix or replace them, and the Company may suffer loss of critical data and interruptions or delays in its
operations. Any material interruption in the Company’s computer systems could negatively affect its business and results of
operations.
A data breach could result in negative publicity and adversely affect the Company’s business or results of operations.
The protection of customer, employee, and company data is critical to the Company. The regulatory environment
surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and
constantly changing requirements across business units. In addition, customers have a high expectation that the Company
will adequately protect their personal information from cyber-attack or other security breaches. A significant breach of
customer, employee, or company data could attract a substantial amount of media attention, damage the Company’s
customer relationships and reputation and result in lost sales, fines or lawsuits.