Saks Fifth Avenue 2009 Annual Report Download - page 9

Table of Contents
Website Access to Information
The Company provides access, free of charge to the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K
and all amendments to those reports as soon as reasonably practicable after the reports are electronically filed with or furnished to the Securities and Exchange
Commission (“SEC”) through the Company’s website, www.saksincorporated.com.
Certifications
The Company filed the certification of its Chief Executive Officer with the New York Stock Exchange (“NYSE”) in fiscal 2009 as required pursuant to
Section 303A.12(a) of the NYSE Listed Company Manual, and the Company has filed the Sarbanes-Oxley Act Section 302 and Section 906 certifications of its
principal executive officer and principal financial officer with the SEC, which are attached hereto as Exhibits 31.1, 31.2, 32.1, and 32.2.
Item 1A. Risk Factors.
The following are certain risk factors that affect the Company’s business, financial condition, results of operations, and cash flows, some of which are
beyond the Company’s control. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual
Report on Form 10-K. The risks and uncertainties described below are not the only ones facing the Company. If any of the events described below were to
actually occur, the Company’s business, financial condition, results of operations or cash flows could be adversely affected and results could differ materially
from expected and historical results.
A decline in the demand for luxury goods due to difficult macroeconomic conditions has had and could continue to have an adverse impact on the
Company’s results of operations.
The Company is focused on the luxury retail sector. SFA stores, OFF 5TH stores and www.saks.com offer a wide assortment of luxury fashion apparel,
shoes, accessories, jewelry, cosmetics, and gift items. All of the goods that the Company sells are discretionary items. Changes in consumer confidence and
fluctuations in financial markets can influence cyclical trends, particularly in the luxury sector. Consequently, starting in the fall of 2008, the downturn in the
economy resulted and may continue to result in fewer customers shopping in the Company’s stores. In response, and in order to reduce inventory levels, the
Company was required to take additional markdowns and to increase promotional events during Fall of 2008 and Spring of 2009. The increased markdowns and
promotional activity negatively impacted the Company’s profitability. Any future unexpected significant decrease in demand could have a similar effect on
profit. As a result of a decrease in consumer spending, the Company has been forced to reduce costs. Despite these measures and continued efforts to align
inventory levels with expected sales in fiscal year 2010, there is no assurance that the Company will be successful in restoring profitability. In addition, in the
event that we are unsuccessful in restoring profitability, we may not be able to realize our net deferred tax assets, which would require us to record a valuation
allowance that could have a material impact on our results of operations in the period in which it is recorded.
Poor economic conditions have affected and may continue to affect consumer spending which has harmed and may continue to harm the Company’s
business.
The retail industry is continuously subject to domestic and international economic trends. The success of the Company’s business depends to a significant
extent upon the level of consumer spending. A number of factors affect the level of consumer spending on merchandise that the Company offers, including,
among other things:
• general economic, industry, and weather conditions;
7
Source: SAKS INC, 10-K, March 18, 2010 Powered by Morningstar® Document Research℠