Express 2011 Annual Report Download - page 25

We rely upon independent third-party transportation providers for substantially all of our product shipments
and are subject to increased shipping costs as well as the potential inability of our third-party transportation
providers to deliver on a timely basis.
We currently rely upon independent third-party transportation providers for substantially all of our product
shipments, including shipments to and from all of our stores. Our utilization of these delivery services for
shipments is subject to risks, including increases in fuel prices which would increase our shipping costs, and
employee strikes and inclement weather which may impact a shipping company’s ability to provide delivery
services that adequately meet our shipping needs. If we change the shipping companies we use, we could face
logistical difficulties that could adversely affect deliveries and we would incur costs and expend resources in
connection with such change. Moreover, we may not be able to obtain terms as favorable as those received from
our current independent third-party transportation providers which in turn would increase our costs.
We depend on key executive management and may not be able to retain or replace these individuals or recruit
additional personnel, which could harm our business.
We depend on the leadership and experience of our key executive management. The loss of the services of any of
our executive management members could have a material adverse effect on our business and prospects, as we
may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring
increased costs, or at all. We believe that our future success will depend greatly on our continued ability to attract
and retain highly skilled and qualified personnel. There is a high level of competition for experienced, successful
personnel in the retail industry. Our inability to meet our staffing requirements in the future could impair our
growth and harm our business.
Our growth strategy, including our international expansion plan, is dependent on a number of factors, any of
which could strain our resources or delay or prevent the successful penetration into new markets.
Our growth strategy is partially dependent on opening new stores across North America, remodeling existing
stores in a timely manner and operating them profitably. Additional factors required for the successful
implementation of our growth strategy include, but are not limited to, obtaining desirable store locations,
negotiating acceptable leases, completing projects on budget, supplying proper levels of merchandise and
successfully hiring and training store managers and sales associates. In order to optimize profitability for new
stores, we must secure desirable retail lease space when opening stores in new and existing markets. We must
choose store sites, execute favorable real estate transactions on terms that are acceptable to us, hire competent
personnel and effectively open and operate these new stores. We historically have received landlord allowances
for store build outs, which offset certain capital expenditures we must make to open a new store. If landlord
allowances cease to be available to us in the future or are decreased, opening new stores would require more
capital outlay, which could adversely affect our ability to continue opening new stores.
To the extent we open new stores in markets where we have existing stores, our existing stores in those markets
may experience reduced net sales. Our planned growth will also require additional infrastructure for the
development, maintenance, and monitoring of those stores. In addition, if our current management systems and
information systems are insufficient to support this expansion, our ability to open new stores and to manage our
existing stores would be adversely affected. If we fail to continue to improve our infrastructure, we may be
unable to implement our growth strategy or maintain current levels of operating performance in our existing
stores.
Additionally, we plan to expand outside of North America through development agreements with third parties
and these plans could be negatively impacted by a variety of factors. We may be unable to find acceptable
partners with whom we can enter into joint development agreements, negotiate acceptable terms for franchise
and development agreements, and gain acceptance from consumers outside of North America. Our planned usage
of franchise and development agreements outside of North America also creates the inherent risk as to whether
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