Express 2010 Annual Report Download - page 29

Our success also depends in substantial part on our ability to originate and define product and fashion trends so
that we can anticipate, gauge, and react to changing consumer demands on a timely basis. While we do not
believe that any retailer directly competes with us on all of these attributes, the sale of apparel and accessories
through retail stores and e-commerce channels is a highly competitive business with numerous competitors that
may sell similar products, including individual and chain stores, department stores, and discount retailers.
Further, we may face new competitors and increased competition from existing competitors as we expand into
new markets and increase our presence in existing markets.
Intellectual Property
The Express trademark and certain variations thereon, such as Express Fashion, are registered or are subject to
pending trademark applications with the United States Patent and Trademark Office and/or with the registries of
many foreign countries. In addition, we own domain names, including express.com, for our primary trademarks.
We believe our material trademarks have significant value, and we vigorously protect them against infringement.
Regulation and Legislation
We are subject to labor and employment laws, including minimum wage requirements, laws governing
advertising and promotions, privacy laws, safety regulations, and other laws, such as consumer protection
regulations that govern product standards and regulations with respect to the operation of our stores and
warehouse facilities. We monitor changes in these laws and believe that we are in material compliance with
applicable laws.
A substantial portion of our products are manufactured outside the United States. These products are imported
and are subject to United States customs laws, which impose tariffs as well as import quota restrictions for
textiles and apparel. Some of our imported products are eligible for duty-advantaged programs. While
importation of goods from foreign countries from which we buy our products may be subject to embargo by
United States customs authorities if shipments exceed quota limits, we closely monitor import quotas and believe
we have a diversified sourcing network to allow us to efficiently shift production to factories located in countries
with a similar manufacturing base if necessary.
Employees
We currently have over 16,000 employees of which approximately 600 employees are based at our corporate
headquarters in either Columbus or New York City, approximately 100 are employed as regional or district
managers in the field, approximately 1,500 serve as store managers or co-managers, and approximately 13,000
are sales associates located in our stores. None of our employees are represented by a union, and we have had no
labor-related work stoppages. We believe our relations with our employees are good.
Seasonality
Our business is seasonal and, historically, we have realized a higher portion of our net sales and net income in the
third and fourth quarters due primarily to early Fall selling patterns as well as the impact of the holiday season. In
2010, approximately 56% of our net sales were generated in the Fall season (third and fourth quarters), while
approximately 44% were generated in the Spring season (first and second quarters). Cash needs are typically
higher in the first and third quarters due to inventory-related working capital requirements for early Fall and
holiday selling periods. Our business is also subject, at certain times, to calendar shifts, which may occur during
key selling periods close to holidays such as Easter, Thanksgiving, and Christmas and regional fluctuations for
events such as sales tax holidays.
Available Information
We make available, free of charge, on our website, www.express.com, copies of our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to these reports filed or
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