Express 2014 Annual Report Download - page 20

If we encounter difficulties with the distribution facilities or in our relationships with the third parties who
operate the facilities, or if either facility were to shut down for any reason, including as a result of fire or other
natural disaster or work stoppage, we could face shortages of inventory, resulting in “out of stock” conditions in
our stores, incur significantly higher costs and longer lead times associated with distributing our products to both
our stores and online customers, and experience dissatisfaction from our customers. Any of these issues could
have a material adverse effect on our business and harm our reputation.
The agreement we have with the third party who operates the e-commerce distribution facility and provides other
e-commerce support services to us, including call center services, is scheduled to terminate May 31, 2016. If we
are unable to transition these services to other third party providers before May 31, 2016, we may be unable to
accept or fulfill customer orders placed online, which could cause a material adverse effect on our business due
to loss of sales, customer dissatisfaction, and harm to our reputation, among other things. We also may
experience significant costs in connection with the transition of services to another provider and suffer additional
strain on resources, in particular information system resources, which may cause disruption or delay to other
information technology projects underway and other business operations. Furthermore, the cost of replacement
services may be more expensive and the terms of such services may be less favorable than our current terms,
which could have a material adverse impact on our business.
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 and to our customers. 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 key executives could have a material adverse effect on our business and prospects, as we may not be able to
find suitable individuals to replace them 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 new store growth, e-commerce, and international expansion plans, 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 outlet stores in the U.S. and operating our stores
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.
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