Foot Locker 2010 Annual Report Download - page 27

Our reliance on key management, store and field associates.
Future performance will depend upon our ability to attract, retain, and motivate our executive and senior
management team, as well as store personnel and field management. Our success depends to a significant extent
both upon the continued services of our current executive and senior management team, as well as our ability to
attract, hire, motivate, and retain additional qualified management in the future. Competition for key executives
in the retail industry is intense, and our operations could be adversely affected if we cannot attract and retain
qualified associates. Many of the store and field associates are in entry level or part-time positions with
historically high rates of turnover. Our ability to meet our labor needs while controlling costs is subject to
external factors such as unemployment levels, prevailing wage rates, minimum wage legislation, and changing
demographics. If we are unable to attract and retain quality associates, our ability to meet our growth goals or to
sustain expected levels of profitability may be compromised. In addition, a large number of our retail employees
are paid the prevailing minimum wage, which if increased would negatively affect our profitability.
We face risks arising from possible union legislation in the United States.
There is a possibility that regulations or legislation may be enacted in the United States along the lines of
the proposed Employee Free Choice Act, which, if adopted or enacted, could significantly change the nature of
labor relations in the United States, specifically, how union elections and contract negotiations are conducted. It
would be easier for unions to win elections and we could face arbitrator-imposed labor scheduling, costs, and
standards. Therefore, this legislation or regulations could impose more labor relations requirements and union
activity on our business, thereby potentially increasing our costs, and could have a material adverse effect on our
overall competitive position.
Health care reform could adversely affect our business.
In 2010, Congress enacted comprehensive health care reform legislation which, among other things, includes
guaranteed coverage requirements, eliminates pre-existing condition exclusions and annual and lifetime
maximum limits, restricts the extent to which policies can be rescinded, and imposes new and significant taxes on
health insurers and health care benefits. Due to the breadth and complexity of the health reform legislation, the
current lack of implementing regulations and interpretive guidance, and the phased-in nature of the
implementation, it is difficult to predict the overall effect of the statute and related regulations on our business
over the coming years. Possible adverse effects of the health reform legislation include increased costs, exposure
to expanded liability and requirements for us to revise ways in which we conduct business.
We may be adversely affected by regulatory and litigation developments.
We are exposed to the risk that federal or state legislation may negatively impact our operations. Changes in
federal or state wage requirements, employee rights, health care, social welfare or entitlement programs such as
health insurance, paid leave programs, or other changes in workplace regulation or tax rates could increase our
cost of doing business or otherwise adversely affect our operations. Additionally, we are regularly involved in
various litigation matters, including class actions and patent infringement claims, which arise in the ordinary
course of our business. Litigation or regulatory developments could adversely affect our business operations and
financial performance.
Failure to fully comply with Section 404 of the Sarbanes-Oxley Act of 2002 could negatively affect our
business, the price of our common stock and market confidence in our reported financial information.
We must continue to document, test, monitor, and enhance our internal controls over financial reporting in
order to satisfy all of the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We cannot be assured
that our disclosure controls and procedures and our internal controls over financial reporting required under
Section 404 of the Sarbanes-Oxley Act will prove to be completely adequate in the future. Failure to fully comply
with Section 404 of the Sarbanes-Oxley Act of 2002 could negatively affect our business, the price of our common
stock, and market confidence in our reported financial information.
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