Radio Shack 2013 Annual Report Download - page 12

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Failure to protect the integrity and security of our
customers’ information could materially damage our
standing with our customers and expose us to
litigation.
Increasing costs associated with information security,
including increased investments in technology, the costs of
compliance with consumer protection laws, and costs
resulting from consumer fraud could materially adversely
affect our results of operations. Additionally, if a significant
compromise in the security of our customer information,
including personal identification data, were to occur, it could
materially adversely affect our reputation, results of
operations and financial condition, and could increase the
costs we incur to protect against such security breaches.
To date, we have not experienced a significant security
compromise.
We are subject to other litigation risks and may face
liabilities as a result of allegations and negative
publicity.
Our operations expose us to litigation risks, such as class
action lawsuits involving employees, consumers and
shareholders. For example, from time to time putative class
actions have been brought against us relating to various
labor matters. Defending against lawsuits and other
proceedings may involve significant expense and divert
management’s attention and resources from other matters.
In addition, if any lawsuits were brought against us and
resulted in a finding of substantial legal liability, it could
cause significant reputational harm to us and otherwise
materially adversely affect our results of operations and
financial condition.
We conduct business outside the United States, which
presents potential risks.
We have offices, assets, personnel, or generate a portion of
our revenue, in Mexico, Hong Kong, Taiwan, Southeast
Asia, and China. Part of our growth strategy is to expand
our international business because we believe the growth
rates and the opportunity to implement operating
improvements there may be greater than those typically
achievable in the United States. International operations
entail significant risks and uncertainties, however, including
without limitation:
• Economic, social and political instability in any
particular country or region
• Changes in currency exchange rates
• Changes in government restrictions on converting
currencies or repatriating funds
• Changes in U.S. or foreign laws and regulations or in
trade, monetary or fiscal policies
• High inflation and monetary fluctuations
• Changes in restrictions on imports and exports
• Difficulties in hiring, training and retaining qualified
personnel, particularly finance and accounting
personnel with expertise in generally accepted
accounting principles in the United States
• Inability to obtain access to fair and equitable
political, regulatory, administrative and legal systems
• Changes in government tax policy
• Difficulties in enforcing our contractual rights or
enforcing judgments or obtaining a just result in
foreign jurisdictions
• Potentially adverse tax consequences of operating in
multiple jurisdictions
• Managing our relationship and contractual rights with
any partner we enter into business with in a foreign
country
• Access to sufficient capital
Any of these factors, by itself or in combination with others,
could materially adversely affect our results of operations
and financial condition.
We may be unable to keep existing retail locations or
open new retail locations in desirable places, which
could materially adversely affect our sales and
profitability.
We may be unable to keep existing retail locations or open
new retail locations in desirable places in the future. We
compete with other retailers and businesses for suitable
retail locations. Local land use, local zoning issues,
environmental regulations and other regulations may affect
our ability to find suitable retail locations and also influence
the cost of leasing, building or buying them. We also may
have difficulty negotiating real estate leases and purchase
agreements on acceptable terms. Further, to relocate or
open new retail locations successfully, we must hire and
train employees for them. Construction, environmental,
zoning and real estate delays may negatively affect retail
location openings and increase costs and capital
expenditures. In addition, when we open new retail
locations in markets where we already have a presence,
our existing locations may experience a decline in sales as
a result, and when we open retail locations in new markets,
we may encounter difficulties in attracting customers due to
a lack of customer familiarity with our brand, our lack of
familiarity with local customer preferences, competition with
new competitors or with existing competitors with a large,
established market presence, and seasonal differences in
the market. We cannot be certain that new or relocated
retail locations will produce the anticipated sales or return
on investment or that existing retail locations will not be
materially adversely affected by new or expanded
competition in their market areas.
Terrorist activities and governmental efforts to thwart
them could materially adversely affect our results of
operations and financial condition.
A terrorist attack or series of attacks on the United States
could have a significant adverse effect on its economy. This
downturn in the economy could, in turn, materially
adversely affect our results of operations and financial
condition. The potential for future terrorist attacks, the
national and international responses to terrorist attacks,
and other acts of war or hostility could cause greater
uncertainty and cause the economy to suffer in ways that
we cannot predict.