718916--8/30/2007--Burlington_Coat_Factory_Investments

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{debt, indebtedness, cash}

{system, service, information}

{customer, product, revenue}

{condition, economic, financial}

{operation, natural, condition}

{stock, price, operating}

{investment, property, distribution}

{acquisition, growth, future}

{product, market, service}

{cost, operation, labor}

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Risks Related to Our Business Our growth strategy includes the addition of a significant number of new stores each year. We may not be able to implement this strategy successfully, on a timely basis, or at all. If we are unable to renew or replace our store leases or enter into leases for new stores on favorable terms, or if one or more of our current leases are terminated prior to the expiration of their stated term and we cannot find suitable alternate locations, our growth and profitability could be harmed. Our net sales, operating income and inventory levels fluctuate on a seasonal basis and decreases in sales or margins during our peak seasons could have a disproportionate effect on our overall financial condition and results of operations. Fluctuations in comparative store sales and results of operations could cause our business performance to decline substantially. Because inventory is both fashion and season sensitive, extreme and/or unseasonable weather conditions could have a disproportionately large effect on our business, financial condition and results of operations because we would be forced to mark down inventory. We do not have long-term contracts with any of our vendors and if we are unable to purchase suitable merchandise in sufficient quantities at competitive prices, we may be unable to offer a merchandise mix that is attractive to our customers and our sales may be harmed. Increases in freight costs could result in lower profitability. Although we purchase most of our inventory from vendors domestically, apparel production is located primarily overseas. Our business would be disrupted severely if our distribution centers were to shut down. Software developed for our management information systems may become obsolete or conflict with the requirements of newer hardware and may cause disruptions in our business. Unauthorized disclosure of sensitive or confidential customer information, whether through a breach of our computer system or otherwise, could severely hurt our business. Disruptions in the Company s information systems could adversely affect its operating results. Acts of terrorism could adversely affect our business. Our future growth and profitability could be adversely affected if our advertising and marketing programs are not effective in generating sufficient levels of customer awareness and traffic. We are in the process of transitioning to new leadership team which may cause business interruptions. The interests of our controlling stockholders may conflict with yours as a holder of the notes. Risk Factors Related to Our Substantial Indebtedness Our substantial indebtedness will require a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations, including making payments on the notes. The indenture governing the senior notes and the credit agreement governing our senior secured credit facilities imposes significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities. Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our results of operations and our financial condition.

Full 10-K form ▸

718916--8/30/2007--Burlington_Coat_Factory_Investments_Holdings