Dick's Sporting Goods 2012 Annual Report Download - page 41

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If we were to lose any key senior executive, especially Mr. Stack, our business could be materially
adversely affected.
Our inability or failure to protect our intellectual property rights, or any claimed infringement by us of third
party intellectual rights could have a negative impact on our operating results.
Our trademarks, service marks, copyrights, patents, trade secrets, domain names and other intellectual
property are valuable assets that are critical to our success. Effective trademark and other intellectual
property protection may not be available in every country in which our products are manufactured or
may be made available. The unauthorized reproduction or other misappropriation of our intellectual
property could diminish the value of our brands or goodwill and cause a decline in our revenue. In
addition, any infringement or other intellectual property claim made against us, whether or not it has
merit, could be time-consuming to address, result in costly litigation, cause product delays, require us to
enter into royalty or licensing agreements or result in our loss of ownership or use of the intellectual
property. As a result, any such claim or our failure to protect our intellectual property could have an
adverse effect on our operating results.
Problems with our information system software could disrupt our operations and negatively impact our
financial results and materially adversely affect our business operations.
Our Dick’s and Golf Galaxy stores utilize a suite of applications from JDA for our core merchandising,
allocation and replenishment systems. These systems, if not functioning properly, could disrupt our
operations, including our ability to track, record and analyze the merchandise that we sell, process
shipments of goods, process financial information or credit card transactions, deliver products or
engage in similar normal business activities. Any material disruption, malfunction or other similar
problems in or with these systems could negatively impact our financial results and materially adversely
affect our business operations.
We may be unable to attract, train, engage and retain qualified leaders and associates.
The training and development of our future leaders and key personnel is important to our long-term
success. If we do not effectively implement our strategic and business planning processes to attract,
retain, train and develop future leaders, our business may suffer. In addition, stores depend significantly
on our ability to hire and retain quality associates, including store managers and sales associates. We
plan to expand our associate base to manage our anticipated growth. The market for non-entry level
personnel, particularly for associates with retail expertise, is highly competitive. Additionally, our ability
to maintain consistency in the quality of customer service in our stores is critical to our success. We are
also dependent on the associates who staff our distribution centers, many of whom are skilled. We may
be unable to meet our leadership needs or our labor needs. If we are unable to train and develop
future leaders and key personnel, or hire and retain store-level and distribution center associates
capable of providing a high level of customer service, our business could be materially adversely
affected.
We rely on four distribution centers, and if there is a natural disaster or other serious disruption at one or
more of these facilities, we may lose merchandise and be unable to effectively deliver it to our stores.
We currently operate a 725,000 square foot distribution center in Plainfield, Indiana, a 657,000 square
foot distribution center near Atlanta, Georgia, a 601,000 square foot distribution center in Smithton,
Pennsylvania and a 624,000 square foot distribution center in Goodyear, Arizona. Any natural disaster
or other serious disruption to one of these facilities due to fire, tornado or any other cause could
damage a material portion of our inventory or impair our ability to adequately stock our stores and
process returns of products to vendors, and could negatively affect our sales and profitability. In
addition, as we grow, we may require additional distribution capacity, which could come in the form of
expanding existing facilities or opening alternative or additional facilities. Any future expansions or
other openings, could affect us in ways we cannot predict.
19