Saks Fifth Avenue 2011 Annual Report Download - page 9

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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 2011 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, and 32.1.
Item 1A. Risk Factors.
The following are 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. 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, Saks Direct and OFF 5TH stores 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 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, which negatively impacted the Company’s profitability in 2008 and 2009. In addition, as a
result of the decrease in consumer spending, the Company was forced to reduce costs. Although the luxury
sector experienced a recovery in 2010 and 2011, there can be no assurance that the economy will continue to
improve or that the Company will be successful in sustaining profitability. In addition, in the event that the
Company is unsuccessful in sustaining profitability, the Company may not be able to realize its net deferred tax
assets, which would require the Company to record a valuation allowance that could have a material impact on
its 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;
▪the performance of the financial, equity, and credit markets;
▪current and expected unemployment levels;
▪crude oil prices that affect gasoline and heating oil prices;
▪the level of consumer debt;
▪the level of consumer savings;
▪interest rates;
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