DSW 2011 Annual Report Download - page 11

Table of Contents
disability insurance and a 401(k) plan to our full-time associates and some of our part-
time associates. We have not experienced any work stoppages,
and we consider our relations with our associates to be good.
Seasonality
Our business is subject to seasonal merchandise trends when our customers’
interest in new seasonal styles increases. New spring styles are
introduced in the first quarter, and new fall styles are introduced in the third quarter. Unlike many other retailers, we have not experienced a significant
increase in net sales during our fourth quarter associated with the winter holiday season.
Available Information
DSW electronically files reports with the Securities and Exchange Commission ("SEC"), including annual reports on Form 10-
K, quarterly reports on
Form 10-Q, current reports on Form 8-
K, proxy statements and amendments to such reports. The public may read and copy any materials that DSW
files with the SEC at the SEC’
s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the
operation at the Public Reference Room by calling the SEC at 1-800-SEC-
0330. The SEC also maintains an internet site that contains reports, proxy
statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. Additionally, information about DSW,
including its reports filed with or furnished to the SEC, is available through DSW’
s website at www.dswinc.com. Such reports are accessible at no
charge through DSW’s website and are made available as soon as reasonably practicable after such material is filed with or furnished to the SEC.
We have included our website addresses throughout this report as textual references only. The information contained on our websites is not
incorporated into this Form 10-K.
ITEM 1A. RISK FACTORS.
In addition to the other information in this Annual Report on Form 10-
K, shareholders or prospective investors should carefully consider the
following risk factors when evaluating DSW. If any of the events described below occurs, our business, financial condition and results of operations
and future growth prospects could be negatively affected.
Risks Relating to Our Business
We opened 17 DSW stores in fiscal 2011 , plan to open 35 to 40 DSW stores in fiscal 2012, and plan to open 15 to 20
DSW stores in each of the
following three to five years, which could strain our resources and have a material adverse effect on our business and financial performance.
Our continued and future growth largely depends on our ability to successfully open and operate new DSW stores on a profitable basis. During
fiscal 2011 , 2010 and 2009 , we opened 17 , 9 and 9 new DSW stores, respectively. We plan to open 35 to 40 stores in fiscal 2012 and plan to open
15
to 20 stores each year for the following three to five years. As of January 28, 2012 , we have signed leases for an additional 22 stores opening in
fiscal
2012 and 2013 . During fiscal 2011
, the average investment in property and equipment, inventory and new store expenses required to open a typical
new DSW store was approximately $2.1 million .
This continued expansion could place increased demands on our financial, managerial, operational and administrative resources. We may not
achieve our planned expansion on a timely and profitable basis or achieve results in new locations similar to those achieved in existing locations in
prior periods. Our ability to open and operate new DSW stores on a timely and profitable basis depends on many factors, including, among others, our
ability to: identify suitable markets and sites for new store locations with financially stable co-
tenants and landlords; negotiate favorable lease terms;
build-
out or refurbish sites on a timely and effective basis; obtain sufficient levels of inventory to meet the needs of new stores; obtain sufficient
financing and capital resources or generate sufficient operating cash flows from operations to fund growth;
open new stores at costs not significantly
greater than those anticipated; successfully open new DSW stores in markets in which we currently have few or no stores;
control the costs of other
capital investments associated with store openings; hire, train and retain qualified managers and store personnel; and successfully integrate new stores
into our existing infrastructure, operations, management and distribution systems or adapt such infrastructure, operations and systems to accommodate
our growth.
As a result, we may be unable to open new stores at the rates expected or at all. If we fail to successfully implement our growth strategy, the
opening of new DSW stores could be delayed or prevented, could cost more than anticipated and could divert resources from other areas of our
business, any of which could have a material adverse effect on our business.
To the extent that we open new DSW stores in our existing markets, we may experience reduced net sales in existing stores in
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