Saks Fifth Avenue 2008 Annual Report Download - page 11

apparel purchases and could have a material adverse effect on the Company’s results of operations and financial
condition. Additionally, natural disasters such as hurricanes, tornadoes, earthquakes and floods may adversely
affect the Company’s results of operations and financial condition.
The Company’s business is intensely competitive and increased or new competition could have a material
adverse effect on the Company.
The retail industry is intensely competitive. As a retailer offering a broad selection of luxury fashion
apparel, shoes, accessories, jewelry, cosmetics and gift items, the Company currently competes against a diverse
group of retailers, including e-commerce retailers, which sell, among other products, products similar to those of
the Company. The Company also competes in particular markets with a substantial number of retailers that
specialize in one or more types of products that the Company sells. Following the sale of the Company’s SDSG
and NDSG businesses, the Company has become less diversified and is now reliant on its luxury retail business.
A number of different competitive factors could have a material adverse effect on the Company’s business,
results of operations and financial condition including:
• Increased operational efficiencies of competitors;
• Competitive pricing strategies, including deep discount pricing by a broad range of retailers during
periods of poor consumer confidence or economic instability;
• Expansion of product offerings by existing competitors;
• Entry by new competitors into markets in which the Company currently operates; and
• Adoption by existing competitors of innovative retail sales methods.
The Company may not be able to continue to compete successfully with its existing or new competitors, or
be assured that prolonged periods of deep discount pricing by its competitors will not have a material adverse
effect on the Company’s business.
The Company faces risks associated with consumer preferences, demand and fashion trends.
Changes in consumer preferences, demand and interest could have a material adverse effect on the
Company’s business. In addition, fashion trends could materially impact sales. Success in the retail business
depends, in part, on the Company’s ability to anticipate consumer preferences and demand. Early order
commitments often are made far in advance of consumer acceptance. If the Company fails to anticipate
accurately and respond to consumer preferences and demand, it could experience lower sales, excess inventories
and lower profit margins, any of which could have a material adverse effect on the Company’s results of
operations and financial condition.
The Company faces a number of risks in opening new stores.
As part of its growth strategy, the Company could potentially increase the total number of stores, which may
include opening new stores in both new and existing markets. The Company may not be able to operate any new
stores profitably. Further, new stores may not achieve operating results similar to those of its existing stores. The
success of any future store openings will depend upon numerous factors, many of which are beyond the
Company’s control, including the following:
• The ability of management to adequately analyze and identify suitable markets and individual store sites
within those markets;
• The ability to attract appropriate vendors;
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