Sears 2014 Annual Report Download - page 6

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Seasonality
The retail business is seasonal in nature, and we generate a high proportion of our revenues, operating income
and operating cash flows during the fourth quarter of our year, which includes the holiday season. As a result, our
overall profitability is heavily impacted by our fourth quarter operating results. Additionally, in preparation for the
fourth quarter holiday season, we significantly increase our merchandise inventory levels, which are financed from
operating cash flows, credit terms received from vendors and borrowings under our domestic credit agreement
(described in the "Uses and Sources of Liquidity" section below). Fourth quarter reported revenues accounted for
approximately 28% of total reported revenues in 2014, excluding the impact of transactions related to Sears Canada
and Lands' End, and 30% of total reported revenues in both 2013 and 2012. See Note 19 of Notes to Consolidated
Financial Statements for further information on revenues earned by quarter in 2014 and 2013.
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 in the U.S. and Canada. 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 15% of our 2014, 13%
of our 2013 and 15% of our 2012 reported revenues. 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 31, 2015, subsidiaries of Holdings had approximately 196,000 employees in the United States and
U.S. territories. 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 or the website address of Sears Canada do not constitute
incorporation by reference of the information contained on such websites, and the information contained on the
websites is not part of this document.