Radio Shack 2008 Annual Report Download - page 15

ITEM 1A. RISK FACTORS.
One should carefully consider the following risks and uncertainties described below, as well as other
information set forth in this Annual Report on Form 10-K. There may be additional risks that are not
presently material or known, and the following list should not be construed as an exhaustive list of all
factors that could cause actual results to differ materially from those expressed in forward-looking
statements made by us. If any of the events described below occur, our business, financial condition,
results of operations, liquidity or access to the capital markets could be materially adversely affected.
We may be unable to successfully execute our strategy to provide cost-effective solutions to meet
the routine consumer electronics needs and distinct consumer electronics wants of our
customers.
To achieve our strategy, we have undertaken a variety of strategic initiatives. Our failure to successfully
execute our strategy or the occurrence of any of the following events could have a material adverse effect
on our ability to maintain or grow our comparable store sales and our business generally:
• Our inability to keep our extensive store distribution system updated and conveniently located
near our target customers
• Our employees’ inability to provide solutions, answers, and information related to increasingly
complex consumer electronics products
• Our inability to recognize evolving consumer electronics trends and offer products that customers
need and want
Adverse changes in national and world-wide economic conditions could negatively affect our
business.
The national and world-wide financial crisis and related adverse changes in the economy could have a
significant negative impact on U.S. consumer spending, particularly discretionary spending for consumer
electronics products, which, in turn, could directly affect our overall sales. Consumer confidence,
recessionary and inflationary trends, equity market levels, consumer credit availability, interest rates,
consumers’ disposable income and spending levels, energy prices, job growth and unemployment rates
may impact the volume of customer traffic and level of sales in our locations. Continued negative trends of
any of these economic conditions, whether national or regional in nature, could adversely affect our
financial results, including our net sales and profitability.
In addition, the national and world-wide financial crisis and potential disruptions in the capital and credit
markets could have a significant impact on our ability to access the U.S. and global capital and credit
markets, if needed. The capital and credit markets have been experiencing extreme volatility and
disruption during the past several quarters. These market conditions could affect our ability to borrow
under our credit facility, or adversely affect the bankers which underwrote our credit facility. Even if the
credit markets improve, the availability of financing will depend on a variety of factors, such as economic
and market conditions and the availability of credit and our credit ratings. If needed, we may not be able to
successfully obtain any necessary additional financing on favorable terms, or at all.
Our inability to increase or maintain profitability in both our wireless and non-wireless platforms
could adversely affect our results.
A critical component of our business strategy is to improve our overall profitability. Our ability to increase
profitable sales in existing stores may also be affected by:
• Our success in attracting customers into our stores
• Our ability to choose the correct mix of products to sell
• Our ability to keep stores stocked with merchandise customers will purchase
• Our ability to maintain fully-staffed stores and trained employees
8