Sears 2011 Annual Report Download - page 6

Competition
Our business is subject to highly competitive conditions. We compete with a wide variety of retailers,
including other department stores, discounters, home improvement stores, consumer electronics dealers, auto
service providers, specialty retailers, wholesale clubs, as well as many other retailers operating on a national,
regional or local level. Online and catalog businesses, which handle similar lines of merchandise, also compete
with us. Walmart, Target, Kohl’s, J.C. Penney, Macy’s, The Home Depot, Lowe’s, Best Buy and Amazon are
some of the national retailers and businesses with which we compete. The Home Depot and Lowe’s are major
competitors in relation to our home appliance business, which accounted for approximately 16% of our 2011 and
2010 and 15% of our 2009 reported revenues. Sears Canada competes in Canada with Hudson’s Bay Company,
other Canadian-based store and online retailers, as well as certain U.S.-based competitors, including those
mentioned above, that may be expanding into Canada. Success in these competitive marketplaces is based on
factors such as price, product assortment and quality, service and convenience, including availability of retail-
related services such as access to credit, product delivery, repair and installation. Additionally, we are influenced
by a number of factors including, but not limited to, the cost of goods, consumer debt availability and buying
patterns, economic conditions, customer preferences, inflation, currency exchange fluctuations, weather patterns,
and catastrophic events. Item 1A in this report on Form 10-K contains further information regarding risks to our
business.
Employees
At January 28, 2012, subsidiaries of Holdings had approximately 264,000 employees in the United States
and U.S. territories, and approximately 29,000 employees in Canada through Sears Canada. These employee
counts include part-time employees.
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
Our operations and financial results are subject to various risks and uncertainties, including those described
below, which could adversely affect our business, results of operations and financial condition.
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.
6