Dillard's 2013 Annual Report Download - page 11

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GE's funding costs, all of which can vary based on changes in federal and state banking and consumer protection laws and from
a variety of economic, legal, social and other factors that we cannot control. If the income or cash flow that the Company
receives from the Alliance decreases, our operating results and cash flows could be adversely affected.
The Alliance expires in late fiscal 2014. If, when the Alliance expires, GE is unable or unwilling to renew and continue
owning and managing our proprietary credit cards on similar terms and conditions as exist today or we are unable to quickly
and adequately contract with a comparable replacement vendor, then our operating results and cash flows could be adversely
affected due to a decrease in credit card sales to our cardholding customers and a loss of revenues attributable to payments from
GE. In addition, if our agreement with GE is terminated prior to its expiration under circumstances in which we are unable to
quickly and adequately contract with a comparable replacement vendor, holders of our proprietary credit card will be unable to
use their cards. This would likely result in a decrease in sales to such customers, a loss of the revenues attributable to the
payments from GE and customer dissatisfaction, any or all of which could have an adverse effect on our business and results of
operations.
Credit card operations are subject to numerous federal and state laws that impose disclosure and other requirements upon
the origination, servicing, and enforcement of credit accounts, and limitations on the amount of finance charges and fees that
may be charged by a credit card provider. GE may be subject to regulations that may adversely impact its operation of our
proprietary credit card. To the extent that such limitations or regulations materially limit the availability of credit or increase the
cost of credit to our cardholders or negatively impact provisions which affect our revenue streams associated with our
proprietary credit card, our results of operations could be adversely affected. In addition, changes in credit card use, payment
patterns, or default rates could be affected by a variety of economic, legal, social, or other factors over which we have no
control and cannot predict with certainty. Such changes could also negatively impact our ability to facilitate consumer credit or
increase the cost of credit to our cardholders.
Our business is seasonal, and fluctuations in our revenues during the last quarter of our fiscal year can have a
disproportionate effect on our results of operations.
Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income
typically realized during the last quarter of our fiscal year due to the holiday season. Our fiscal fourth-quarter results may
fluctuate significantly, based on many factors, including holiday spending patterns and weather conditions, and any such
fluctuation could have a disproportionate effect on our results of operations for the entire fiscal year. Because of the seasonality
of our business, our operating results vary considerably from quarter to quarter, and results from any quarter are not necessarily
indicative of the results that may be achieved for a full fiscal year.
A shutdown of, or disruption in, any of the Company's distribution or fulfillment centers would have an adverse effect on
the Company's business and operations.
Our business depends on the orderly operation of the process of receiving and distributing merchandise, which relies on
adherence to shipping schedules and effective management of distribution centers. Although we believe that our receiving and
distribution process is efficient and that we have appropriate contingency plans, unforeseen disruptions in operations due to
fire, severe weather conditions, natural disasters, or other catastrophic events, labor disagreements, or other shipping problems
may result in the loss of inventory and/or delays in the delivery of merchandise to our stores and customers.
Current store locations may become less desirable, and desirable new locations may not be available for a reasonable price,
if at all, either of which could adversely affect our results of operations.
In order to generate customer traffic and for convenience of our customers, we locate our stores in desirable locations
within shopping malls. Our stores benefit from the abilities that our Company, other anchor tenants and other area attractions
have to generate consumer traffic. They also benefit from the continuing popularity of shopping malls as shopping destinations.
Adverse changes in the development of new shopping malls in the United States, the availability or cost of appropriate
locations within existing or new shopping malls, competition with other retailers for prominent locations, the success of
individual shopping malls and the success of other anchor tenants, or the continued popularity of shopping malls may impact
our ability to maintain or grow our sales in our existing stores, as well as our ability to open new stores, which could have an
adverse effect on our financial condition or results of operations.
Many shopping mall operators have been severely impacted by the recent global economic downturn. The continuation of
the economic slowdown in the United States could impact shopping mall operators' financial ability to develop new shopping
malls and properly maintain existing shopping malls, which could adversely affect our sales.