Pier 1 2012 Annual Report Download - page 17

Failure to successfully manage the Company’s e-Commerce operations could negatively affect the
business.
The Company plans to have full e-Commerce functionality in the United States during fiscal 2013.
Successful operation of the e-Commerce initiatives will be dependent on the Company’s ability to maintain
uninterrupted availability of the Company’s website and supporting applications, adequate inventory levels, and
timely fulfillment of customer orders. Failure to successfully manage this process may negatively impact sales,
result in the loss of customers, and damage the Company’s reputation.
The Company’s business may be harmed by adverse weather conditions and natural disasters.
Extreme or undesirable weather can negatively affect customer traffic in retail stores as well as customer
shopping behavior. Natural disasters such as earthquakes, weather phenomena, and events causing infrastructure
failures could negatively affect any of the Company’s retail locations, distribution centers, administrative
facilities, ports, or locations of its suppliers domestically and in foreign countries.
Risks Associated with Dependence on Technology
The Company is heavily dependent on various kinds of technology in the operation of its business.
Failure of any critical software applications, technology infrastructure, telecommunications, data
communications, data storage equipment, or networks could have a negative effect on the Company’s ability to
manage the merchandise supply chain, sell merchandise, accomplish payment functions, report financial data or
manage labor and staffing. Although the Company maintains off-site data backups, a concentration of
technology-related risk exists in the Company’s headquarters located in Fort Worth, Texas.
Failure to protect the integrity and security of individually identifiable data of the Company’s customers
and employees could expose the Company to litigation and damage the Company’s reputation.
The Company receives and maintains certain personal information about its customers and employees.
The use of this information by the Company is regulated at the international, federal and state levels, and is
subject to certain contractual restrictions in third party contracts. Although the Company has implemented
processes to protect the integrity and security of personal information, there can be no assurance that this
information will not be obtained by unauthorized persons or used inappropriately. If the security and information
systems of the Company or of its business associates are compromised or its business associates fail to comply
with these laws and regulations and this information is obtained by unauthorized persons or used inappropriately,
it could negatively affect the Company’s reputation, as well as operations and financial results, and could result
in litigation against the Company or the imposition of penalties. As privacy and information security laws and
regulations change, the Company may incur additional costs to ensure it remains in compliance.
Failure to successfully implement new information technology systems and enhance existing systems
could negatively impact the business and its financial results.
As part of the Company’s three-year growth plan, the Company is investing in new information
technology systems and implementing modifications and upgrades to existing systems. These investments
include replacing legacy systems, making changes to existing systems, and acquiring new systems and hardware
with updated functionality. The Company is taking appropriate actions to ensure the successful implementation
of these initiatives, including the testing of new systems and the transfer of existing data, with minimal
disruptions to the business. However, there can be no assurance the Company has anticipated all potential risks
and failure to successfully implement these initiatives could negatively impact the business and its financial
results.
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