Sears 2010 Annual Report Download - page 6

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Our Website; Availability of SEC Reports and Other Information
Our corporate website is located at searsholdings.com. Our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports are available, free of
charge, through the “SEC Filings” portion of the Investor Information section of our website as soon as
reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange
Commission (“SEC”).
The Corporate Governance Guidelines of our Board of Directors, the charters of the Audit, Compensation,
Finance and Nominating and Corporate Governance Committees of the Board of Directors, our Code of Conduct
and the Board of Directors Code of Conduct are available in the Corporate Governance section of
searsholdings.com. References to our website address do not constitute incorporation by reference of the
information contained on the website, and the information contained on the website is not part of this document.
Item 1A. Risk Factors
The following risk factors could adversely affect our business, results of operations and financial condition.
The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not
presently known to us may also negatively impact our business.
If we fail to offer merchandise and services that our customers want, our sales may be limited, which
would reduce our revenues and profits.
In order for our business to be successful, we must identify, obtain supplies of, and offer to our customers,
attractive, innovative and high-quality merchandise on a continuous basis. Our products and services must satisfy
the desires of our customers, whose preferences may change in the future. If we misjudge either the demand for
products and services we sell or our customers’ purchasing habits and tastes, we may be faced with excess
inventories of some products and missed opportunities for products and services we chose not to offer. In
addition, our sales may decline or we may be required to sell the merchandise we have obtained at lower prices.
This would have a negative effect on our business and results of operations.
If we do not successfully manage our inventory levels, our operating results will be adversely affected.
We must maintain sufficient inventory levels to operate our business successfully. However, we also must
guard against accumulating excess inventory as we seek to minimize out-of-stock levels across all product
categories and to maintain in-stock levels. We obtain a significant portion of our inventory from vendors located
outside the United States. Some of these vendors often require lengthy advance notice of our requirements in
order to be able to supply products in the quantities we request. This usually requires us to order merchandise,
and enter into purchase order contracts for the purchase and manufacture of such merchandise, well in advance of
the time these products will be offered for sale. As a result, we may experience difficulty in responding to a
changing retail environment, which makes us vulnerable to changes in price. If we do not accurately anticipate
the future demand for a particular product or the time it will take to obtain new inventory, our inventory levels
will not be appropriate and our results of operations may be negatively impacted.
If we are unable to compete effectively in the highly competitive retail industry, our business and results of
operations could be materially adversely affected.
The retail industry is highly competitive with few barriers to entry. We compete with a wide variety of
retailers, including other department stores, discounters, home improvement stores, home appliances and
consumer electronics retailers, auto service providers, specialty retailers, wholesale clubs and many other
competitors operating on a national, regional or local level. Some of our competitors are actively engaged in new
store expansion. Online and catalog businesses, which handle similar lines of merchandise, also compete with us.
In this competitive marketplace, success is based on factors such as price, product assortment and quality, service
and convenience.
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