Foot Locker 2013 Annual Report Download - page 32

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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 continue to document, test, and monitor our internal controls over financial reporting in order to satisfy all
of the requirements of Section 404 of the Sarbanes-Oxley Act of 2002; however we cannot be assured that our
disclosure controls and procedures and our internal controls over financial reporting will prove to be completely
adequate in the future. Failure to fully comply with Section 404 of the Sarbanes-Oxley Act of 2002 could nega-
tively affect our business, the price of our common stock, and market confidence in our reported financial
information.
Risk associated with our recent acquisition.
During the second quarter of 2013, the Company acquired Runners Point Group, a specialty athletic store and
online retailer based in Recklinghausen, Germany. The acquisition of Runners Point Group involves a number of
risks, which could significantly and adversely affect our business, financial condition, and results of operations,
including:
— failure of Runners Point Group to achieve the results that we expect;
— diversion of management’s attention from operational matters;
— difficulties integrating the operations and personnel;
— potential difficulties associated with the retention of key personnel; and
— increased business concentration in Germany.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The properties of the Company and its consolidated subsidiaries consist of land, leased stores, administrative
facilities, and distribution centers. Gross square footage and total selling area for the Athletic Stores segment
at the end of 2013 were approximately 12.71 and 7.47 million square feet, respectively. These properties, which
are primarily leased, are located in the United States, Canada, various European countries, Australia, and New
Zealand.
The Company currently operates six distribution centers, of which three are owned and three are leased, occu-
pying an aggregate of 2.6 million square feet. Three distribution centers are located in the United States, two
in Germany, and one in the Netherlands. The two locations in Germany relate to the central warehouse distri-
bution center for the Runners Point Group store locations as well as the distribution center for its direct-to-
customer business. We also own a cross-dock facility and operate a leased manufacturing facility in the U.S.,
both of which we operate in support of our Team Edition apparel business.
Item 3. Legal Proceedings
Information regarding the Company’s legal proceedings is contained in the Legal Proceedings note under
‘‘Item 8. Consolidated Financial Statements and Supplementary Data.’’
Item 4. Mine Safety Disclosures
Not applicable.
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