Radio Shack 2011 Annual Report Download - page 16

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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 and retain 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 results
of operation and financial condition.
Our success depends in large part upon our ability to
attract, motivate and retain a qualified management team
and other 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 results of operations and financial condition.
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 minimum wage or health care reform may
materially increase our employee-related costs.
Our inability to identify and enter into relationships
with developers of new technologies successfully 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 results of operations
and financial condition.
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 results of
operations and financial condition 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 materially adversely affecting our results
of operation and financial condition. Finally, the lack of
innovative consumer electronics products, features or
services that can be effectively featured in our retail
locations 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 retail locations 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 retail
locations 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 retail locations, our sales could also be materially
adversely affected. If severe weather occurs during the
fourth quarter holiday season, the adverse effect on our
sales could be even greater than at other times during the
year because we generate a disproportionate amount of
our sales during this period.
Failure to comply with, or the additional
implementation of, laws, rules, and regulations
regarding our business could materially adversely
affect 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
Fair Labor Standards Act and ERISA, each as amended,
and regulations promulgated by the Federal Trade
Commission, SEC, Internal Revenue Service, Department
of Labor, Occupational Safety and Health Administration,
and Environmental Protection Agency. Failure to properly
adhere to these and other applicable laws, rules and
regulations could result in the imposition of penalties or
adverse legal judgments and could materially adversely
affect our results of operations and financial condition.
Similarly, the cost of complying with newly-implemented
laws, rules and regulations could materially adversely affect
our results of operations and financial condition.
Risks associated with the suppliers from whom our
products are sourced could materially adversely affect
our results of operations and financial condition.
We utilize a large number of suppliers located in various
parts of the world to obtain private brand merchandise and
other products. If any of our key vendors fail to supply us
with products, we may not be able to meet the demands of
our customers, and our sales and profitability could be
materially adversely affected.
We purchase a significant portion of our inventory from
manufacturers located in China. Changes in trade