Big Lots 2014 Annual Report Download - page 91

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We also may be subject to a number of other factors which may, individually or in the aggregate, materially or adversely
affect our business. These factors include, but are not limited to:
• Fluctuating commodity prices, including but not limited to diesel fuel and other fuels used to generate power by
utilities, may affect our gross profit and operating profit margins.
• Changes in governmental laws and regulations, including matters related to taxation. In particular, income tax reform
in which the marginal tax rates are significantly reduced could adversely impact the value of our net deferred tax
assets;
• A downgrade in our credit rating could negatively affect our ability to access capital or could increase our borrowing
costs;
• Events or circumstances could occur which could create bad publicity for us or for types of merchandise offered in our
stores which may negatively impact our business results including our sales;
• Infringement of our intellectual property, including the Big Lots trademarks, could dilute their value;
• Other risks described from time to time in our filings with the SEC.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Retail Operations
All of our stores are located in the United States, predominantly in strip shopping centers, and have an average store size of
approximately 30,900 square feet, of which an average of 21,900 is selling square feet. For additional information about the
properties in our retail operations, see the discussion under the caption “Real Estate” in “Item 1. Business” in this Form 10-K.
The average cost to open a new store in a leased facility during 2014 was approximately $1.1 million, including the cost of
inventory. Except for 55 owned sites, all of our stores are leased. Additionally, we still own one site, which we closed in 2012,
for which we have not yet completed the sale transaction. Since this owned site is no longer operating as an active store, it has
been excluded from our store count at January 31, 2015. The 55 owned stores are located in the following states:
State Stores Owned
Arizona 2
California 39
Colorado 3
Florida 3
Louisiana 1
Michigan 1
New Mexico 2
Ohio 1
Texas 3
Total 55
Store leases generally obligate us for fixed monthly rental payments plus the payment, in most cases, of our applicable portion
of real estate taxes, common area maintenance costs (“CAM”), and property insurance. Some leases require the payment of a
percentage of sales in addition to minimum rent. Such payments generally are required only when sales exceed a specified
level. Our typical store lease is for an initial minimum term of five to ten years with multiple five-year renewal options. Sixty-
nine store leases have sales termination clauses which can result in our exiting a location at our option if certain sales volume
results are not achieved.