Radio Shack 2010 Annual Report Download - page 18

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Our inability to effectively manage our inventory levels,
particularly excess or inadequate amounts of
inventory, could materially adversely affect our results
of operations and financial condition.
We source inventory both domestically and internationally,
and our inventory levels are subject to a number of factors,
some of which are beyond our control. These factors,
including technology advancements, reduced consumer
spending and consumer disinterest in our product offerings,
could lead to excess inventory levels. Additionally, we may
not accurately assess product life cycles, leaving us with
excess inventory. To reduce this excess inventory, we may
be required to lower our prices, which could materially
adversely affect our results of operations and financial
condition.
Alternatively, we may have inadequate inventory levels for
particular items, including popular merchandise, due to
factors such as unanticipated high demand for certain
products, unavailability of products from our vendors,
import delays, labor unrest, untimely deliveries, or the
disruption of international, national or regional
transportation systems. The effect of the occurrence of any
of these factors on our inventory supply could materially
adversely affect our results of operations and financial
condition.
Our inability to attract, retain and grow an effective
management team or changes in the cost or availability
of a suitable workforce to manage and support our
strategies could materially adversely affect our
business.
Our success depends in large part upon our ability to
attract, motivate and retain a qualified management team
and employees. Qualified individuals needed to fill
necessary positions could be in short supply. The inability
to recruit and retain such individuals on a continuous basis
could result in high employee turnover at our stores and in
our company generally, which could materially adversely
affect our business and results of operations. Additionally,
competition for qualified employees requires us to
continually assess our compensation structure. Competition
for qualified employees has required, and in the future
could require, us to pay higher wages to attract a sufficient
number of qualified employees, resulting in higher labor
compensation expense. In addition, mandated changes in
the federal minimum wage or in health care reform may
materially increase our compensation expense.
Our inability to successfully identify and enter into
relationships with developers of new technologies or
the failure of these new technologies to be adopted by
the market could materially adversely affect our ability
to increase or maintain our sales and profitability.
Additionally, the absence of new services or products
and product features in the categories we sell could
materially adversely affect our sales and profitability.
Our ability to maintain and increase revenues depends, to a
large extent, on the periodic introduction and availability of
new products, services and technologies. If we fail to
identify these new products, services and technologies, or if
we fail to enter into relationships with their developers prior
to widespread distribution within the market, our sales and
profitability could be materially adversely affected. Any new
products, services or technologies we identify may have a
limited sales life.
Furthermore, it is possible that new products, services or
technologies will never achieve widespread consumer
acceptance, also adversely affecting our sales and
profitability. Finally, the lack of innovative consumer
electronics products, features or services that can be
effectively featured in our store model could also materially
adversely affect our ability to increase or maintain our sales
and profitability.
The occurrence of severe weather events or natural
disasters could significantly damage or destroy our
retail locations, could prohibit consumers from
traveling to our retail locations, or could prevent us
from resupplying our stores or distribution centers,
especially during the peak winter holiday shopping
season.
If severe weather or a catastrophic natural event, such as a
hurricane or earthquake, occurs in a particular region and
damages or destroys a significant number of our stores in
that area, our sales could be materially adversely affected.
In addition, if severe weather, such as heavy snowfall or
extreme temperatures, discourages or restricts customers
in a particular region from traveling to our stores, our sales
could also be materially adversely affected. If severe
weather occurs during the fourth quarter holiday season,
the adverse effect on our sales and gross profit could be
even greater than at other times during the year because
we generate a disproportionate amount of our sales and
gross profit during this period.
Failure to comply with, or the additional
implementation of, laws, rules, and regulations
regarding our business could materially adversely
affect our business and our results of operations and
financial condition.
We are subject to various foreign, federal, state, and local
laws, rules and regulations including, but not limited to, the