Banana Republic 2014 Annual Report Download - page 23

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Our results could be adversely affected by natural disasters, public health crises, political crises, or other
catastrophic events.
Natural disasters, such as hurricanes, tornadoes, floods, earthquakes, and other adverse weather and climate
conditions; unforeseen public health crises, such as pandemics and epidemics; political crises, such as terrorist
attacks, war, labor unrest, and other political instability; or other catastrophic events, such as disasters occurring
at our vendors' manufacturing facilities, whether occurring in the United States or internationally, could disrupt our
operations, the operations of our franchisees, or the operations of one or more of our vendors. In particular, these
types of events could impact our product supply chain from or to the impacted region and could impact our ability
or the ability of our franchisees or other third parties to operate our stores or websites. In addition, these types of
events could negatively impact consumer spending in the impacted regions or depending upon the severity,
globally. Disasters occurring at our vendors’ manufacturing facilities could impact our reputation and our
customers’ perception of our brands. To the extent any of these events occur, our operations and financial results
could be adversely affected.
Changes in the regulatory or administrative landscape could adversely affect our financial condition and
results of operations.
Laws and regulations at the local, state, federal, and international levels frequently change, and the ultimate cost
of compliance cannot be precisely estimated. In addition, we cannot predict the impact that may result from
changes in the regulatory or administrative landscape. Any changes in regulations, the imposition of additional
regulations, or the enactment of any new or more stringent legislation that impacts employment and labor, trade,
product safety, transportation and logistics, health care, tax, privacy, operations, or environmental issues, among
others, could have an adverse impact on our financial condition and results of operations.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
We have Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan,
Italy, China, Hong Kong, and as of March 2014, Taiwan. As of January 31, 2015, we had 3,280 Company-
operated stores, which aggregated to approximately 38.1 million square feet. Almost all of these stores are
leased, with one or more renewal options after our initial term. Economic terms vary by type of location.
We own approximately 937,000 square feet of corporate office space located in San Francisco, San Bruno, and
Rocklin, California, of which approximately 193,000 square feet is leased to and occupied by others. We lease
approximately 1.0 million square feet of corporate office space located in San Francisco, Rocklin, Petaluma,
Pleasanton, and Los Angeles, California; New York, New York; Albuquerque, New Mexico; and Toronto, Ontario,
Canada. We also lease regional offices in North America and in various international locations. We own
approximately 8.6 million square feet of distribution space located in Fresno, California; Fishkill, New York;
Groveport, Ohio; Gallatin, Tennessee; Brampton, Ontario, Canada; and Rugby, England. Of the 8.6 million square
feet of owned distribution space, approximately 100,000 square feet is leased to others. We lease approximately
1.8 million square feet of distribution space located in Phoenix, Arizona; Grove City and Obetz, Ohio; Erlanger
and Hebron, Kentucky; Bolton and Mississauga, Ontario, Canada; and Stafford, England. Third-party logistics
companies provide logistics services to us through distribution warehouses in Chiba, Japan; Shanghai and Hong
Kong, China; and Edison, New Jersey.
Item 3. Legal Proceedings.
As a multinational company, we are subject to various proceedings, lawsuits, disputes, and claims (“Actions”)
arising in the ordinary course of our business. Many of these Actions raise complex factual and legal issues and
are subject to uncertainties. Actions filed against us from time to time include commercial, intellectual property,
customer, employment, and data privacy claims, including class action lawsuits. The plaintiffs in some Actions
seek unspecified damages or injunctive relief, or both. Actions are in various procedural stages and some are
covered in part by insurance.