Radio Shack 2009 Annual Report Download - page 15

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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 certain events, including the following, could materially
adversely affect 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 or want
Adverse changes in national and world-wide economic conditions could negatively affect our
business.
The continued uncertainty in the economy could have a significant negative effect on U.S. consumer
spending, particularly discretionary spending for consumer electronics products, which, in turn, could
directly affect our 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, income tax rates and unemployment rates may affect 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 results of operations, including our net
sales and profitability.
In addition, potential disruptions in the capital and credit markets could have a significant effect on our
ability to access the U.S. and global capital and credit markets, if needed. These potential disruptions in
the capital and credit market conditions could affect our ability to borrow under our credit facility, or
adversely affect the banks that underwrote our credit facility. 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 of our operations 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 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 with appropriately trained employees
• Our ability to remain relevant to the consumer