278130--5/7/2008--PIER_1_IMPORTS

related topics

{acquisition, growth, future}

{condition, economic, financial}

{customer, product, revenue}

{system, service, information}

{product, market, service}

{operation, natural, condition}

{cost, contract, operation}

{personnel, key, retain}

{operation, international, foreign}

{financial, litigation, operation}

{regulation, change, law}

Strategic Risks and Strategy Execution Risks The Company s turnaround strategy may cause a disruption in operations and may not be successful. The Company must be able to anticipate, identify and respond to changing trends and customer preferences for home furnishings. Failure to control merchandise returns could negatively impact the business. A disruption in the operation of the domestic portion of the Company s supply chain could impact its ability to deliver merchandise to its stores and customers, which could impact its sales and results of operations. The success of the business is dependent on factors affecting consumer spending that are not controllable by the Company. Factors that may or may not be controllable by the Company may adversely affect the Company s financial performance. Failure to successfully manage and execute the Company s marketing initiatives could have a negative impact on the business. Changes to estimates related to the Company s property and equipment, or operating results that are lower than its current estimates at certain store locations, may cause the Company to incur impairment charges on certain long-lived assets. Risks Related to Store Profitability The Company s success depends, in part, on its ability to operate in desirable locations at reasonable rental rates and to close underperforming stores at or before the conclusion of their lease terms. Failure to attract and retain an effective management team or changes in the costs or availability of a suitable workforce to manage and support the Company s stores and distribution facilities could adversely affect the business. Factors affecting the general strength of the economy in periods of decline could result in reduced consumer demand for the Company s products. The Company operates in a highly competitive retail environment with companies offering similar merchandise, and if customers are lost to the Company s competitors, sales could decline. The Company s business is subject to seasonal variations, with a significant portion of its sales and earnings occurring during two months of the year. The Company s business may be harmed by adverse weather conditions and natural disasters. Risks Associated with Dependence on Technology The Company is heavily dependent on various kinds of technology in the operation of its business. The Company outsources certain business processes to third-party vendors that subject the Company to risks, including disruptions in business and increased costs. 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 is subject to laws and regulatory requirements in many jurisdictions. Changes in these laws and requirements may result in additional costs to the Company, including the costs of compliance as well as potential penalties for non-compliance. Risks Associated with International Trade As a retailer of imported merchandise, the Company is subject to certain risks that typically do not affect retailers of domestically produced merchandise.

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278130--5/7/2008--PIER_1_IMPORTS_INC/DE