TJ Maxx 2006 Annual Report Download - page 29

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extended periods of unseasonable temperatures in our markets could adversely affect our sales and increase
markdowns.
We operate in highly competitive markets, and we may not be able to compete effectively.
The retail business is highly competitive. We compete for customers, associates, locations, merchandise, services
and other important aspects of our business with many other local, regional and national retailers. We also face
competition from alternative retail distribution channels such as catalogues, media and internet sites. Changes in the
merchandising, pricing and promotional activities of those competitors and in the retail industry generally may
adversely affect our performance.
If we do not attract and retain quality sales, distribution center and other associates in large numbers as well as experi-
enced buying and management personnel, our performance could be adversely affected.
Our performance is dependent on recruiting, developing, training and retaining quality sales, distribution center
and other associates in large numbers as well as experienced buying and management personnel. Many of our associates
are in entry level or part-time positions with historically high rates of turnover. The nature of the workforce in the retail
industry subjects us to the risk of immigration law violations. Our ability to meet our labor needs while controlling costs
is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and
changing demographics. In the event of increasing wage rates, if we do not increase our wages competitively, our
customer service could suffer because of a declining quality of our workforce, or our earnings could decrease if we
increase our wage rates. In addition, certain associates in our distribution centers are members of unions and therefore
subject us to the risk of labor actions. Further, our off-price model limits the market for experienced buying and
management personnel and requires us to do significant internal training and development. Changes that adversely
impact our ability to attract and retain quality associates and management personnel could adversely affect our
performance.
If we engage in mergers or acquisitions of new businesses, or divest any of our current businesses, our business will be sub-
ject to additional risks.
We have grown our business through mergers and acquisitions. Integrating new stores and concepts can be a
difficult task. We may consider attractive opportunities to acquire new businesses or to divest any of our current
business segments. Acquisition or divestiture activities may divert attention of our executive management team away
from the existing businesses. We may do a less than optimal job of due diligence or evaluation of target companies.
Divestiture also involves risks, such as the risk of future exposure on lease obligations. Failure to execute on mergers or
divestitures in a satisfactory manner could have an adverse effect on our future business prospects or our financial
performance in the future.
If we are unable to operate information systems and implement new technologies effectively, our business could be disrupted
or our sales or profitability could be reduced.
The efficient operation of our business is dependent on our information systems, including our ability to operate
them effectively and to successfully implement new technologies, systems, controls and adequate disaster recovery
systems. In addition, we must protect the confidentiality of our and our customers’ data. The failure of TJX’s
information systems to perform as designed or our failure to implement and operate them effectively could disrupt
our business or subject us to liability and thereby harm our profitability. See also the risk factor above entitled “We have
expended and expect to expend significant time and money as a result of the Computer Intrusion we suffered, and as a result of
the Computer Intrusion, we could incur material losses, and our reputation and business could be materially harmed.”
We depend upon strong cash flows from our operations to support new capital expansion, operations, debt repayment and
stock repurchase program.
Our business is dependent upon our operations generating strong cash flows to support our capital expansion
requirements, our general operating activities and our stock repurchase programs and to fund debt repayment and the
availability of financing sources. Our inability to continue to generate sufficient cash flows to support these activities or
the lack of availability of financing in adequate amounts and on appropriate terms could adversely affect our financial
performance or our earnings per share growth.
15