Pottery Barn 2005 Annual Report Download - page 18

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“westelm.com,” “holdeverything.com,” “williamssonomahome.com,” and “williams-sonomainc.com.”
Collectively, the copyrights, trade dress rights, patents and domain names that we hold are of material
importance to us.
EMPLOYEES
As of January 29, 2006, we had approximately 37,200 employees, approximately 7,700 of whom were full-time
employees. During the fiscal 2005 peak season, we hired approximately 15,500 temporary employees in our
stores and in our direct-to-customer processing and distribution centers.
AVAILABLE INFORMATION
We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and
information statements and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) of
the Securities Exchange Act of 1934, as amended. The public may read and copy these materials at the SEC’s
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a
website at www.sec.gov that contains reports, proxy and information statements and other information regarding
Williams-Sonoma, Inc. and other companies that file materials with the SEC electronically. You may also obtain
copies of our annual reports, Forms 10-K, Forms 10-Q and Forms 8-K, free of charge, on our website at
www.williams-sonomainc.com.
ITEM 1A. RISK FACTORS
The following information describes certain significant risks and uncertainties inherent in our business. You
should carefully consider such risks and uncertainties, together with the other information contained in this
Annual Report on Form 10-K and in our other public filings. If any of such risks and uncertainties actually
occurs, our business, financial condition or operating results could differ materially from the plans, projections
and other forward-looking statements included in the section titled “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and elsewhere in this report and in our other public filings. In
addition, if any of the following risks and uncertainties, or if any other risks and uncertainties, actually occurs,
our business, financial condition or operating results could be harmed substantially, which could cause the
market price of our stock to decline, perhaps significantly.
We must successfully anticipate changing consumer preferences and buying trends, and manage our inventory
commensurate with customer demand.
Our success depends, in large part, upon our ability to anticipate and respond in a timely manner to changing
merchandise trends and customer demands. Consumer preferences cannot be predicted with certainty and may
change between selling seasons. Changes in customer preferences and buying trends may also affect our brands
differently. If we misjudge either the market for our merchandise or our customers’ purchasing habits, our sales
may decline significantly, and we may be required to mark down certain products to sell the resulting excess
inventory or to sell such inventory through our outlet stores or other liquidation channels at prices which are
significantly lower than our retail prices, either of which would negatively impact our business and operating
results.
In addition, we must manage our inventory effectively and commensurate with customer demand. Much of our
inventory is sourced from vendors located outside the U.S. Thus, we usually must order merchandise, and enter
into contracts for the purchase and manufacture of such merchandise, up to twelve months in advance of the
applicable selling season and frequently before trends are known. The extended lead times for many of our
purchases may make it difficult for us to respond rapidly to new or changing trends. Our vendors may also not
have the capacity to handle our demands. In addition, the seasonal nature of the specialty home products business
requires us to carry a significant amount of inventory prior to peak selling season. As a result, we are vulnerable
to demand and pricing shifts and to misjudgments in the selection and timing of merchandise purchases. If we do
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