719955--4/1/2010--WILLIAMS_SONOMA

related topics

{product, market, service}

{system, service, information}

{acquisition, growth, future}

{stock, price, operating}

{condition, economic, financial}

{customer, product, revenue}

{personnel, key, retain}

{cost, operation, labor}

{operation, international, foreign}

{cost, contract, operation}

{regulation, change, law}

{operation, natural, condition}

{control, financial, internal}

{property, intellectual, protect}

{financial, litigation, operation}

{stock, price, share}

{tax, income, asset}

{loss, insurance, financial}

{capital, credit, financial}

The changes in general economic conditions over the past few years, and the resulting impact on consumer confidence and consumer spending, could continue to adversely impact our results of operations. We are unable to control many of the factors affecting consumer spending, and declines in consumer spending on home furnishings in general could reduce demand for our products. If we are unable to identify and analyze factors affecting our business, anticipate changing consumer preferences and buying trends, and manage our inventory commensurate with customer demand, our sales levels and profit margin may decline. Our sales may be negatively impacted by increasing competition from companies with brands or products similar to ours. We depend on key domestic and foreign agents and vendors for timely and effective sourcing of our merchandise, and we may not be able to acquire products in sufficient quantities and at acceptable prices to meet our needs, which would impact our operations and financial results. Our dependence on foreign vendors and our increased overseas operations subject us to a variety of risks and uncertainties that could impact our operations and financial results. A number of factors that affect our ability to successfully open new stores or close existing stores are beyond our control, and these factors may harm our ability to expand or contract our retail operations and harm our ability to increase our sales and profits. Our business and operating results may be harmed if we are unable to timely and effectively deliver merchandise to our stores and customers. Our failure to successfully manage our order-taking and fulfillment operations could have a negative impact on our business and operating results. Our facilities and systems, as well as those of our vendors, are vulnerable to natural disasters and other unexpected events, any of which could result in an interruption in our business and harm our operating results. Declines in our comparable store sales may harm our operating results and cause a decline in the market price of our common stock. Our failure to successfully manage the costs and performance of our catalog mailings might have a negative impact on our business If we are unable to effectively manage our Internet business, our reputation and operating results may be harmed. Our failure to successfully anticipate merchandise returns might have a negative impact on our business. If we are unable to manage successfully the complexities associated with a multi-channel and multi-brand business, we may suffer declines in our existing business and our ability to attract new business. If we are unable to introduce new brands and brand extensions successfully, or to reposition or close existing brands, our business and operating results may be negatively impacted. Our inability to obtain commercial insurance at acceptable prices or our failure to adequately reserve for self-insured exposures might increase our expenses and have a negative impact on our business. Our inability or failure to protect our intellectual property would have a negative impact on our brands, goodwill and operating results. We may be subject to legal proceedings that could be time consuming, result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. Our operating results may be harmed by unsuccessful management of our employment, occupancy and other operating costs, and the operation and growth of our business may be harmed if we are unable to attract qualified personnel. We are undertaking certain systems changes that might disrupt our business operations. We outsource certain aspects of our business to third party vendors and are in the process of insourcing certain business functions from third party vendors, both of which subject us to risks, including disruptions in our business and increased costs. Our efforts to expand internationally through franchising arrangements may not be successful and could impair the value of our brands. If our operating and financial performance in any given period does not meet the extensive guidance that we have provided to the public, our stock price may decline. A variety of factors, including seasonality and the economic downturn, may cause our quarterly operating results to fluctuate, leading to volatility in our stock price. We may require external funding sources for operating funds, which may cost more than we expect, or not be available at the levels we require and, as a consequence, our expenses and operating results could be negatively affected. Disruptions in the financial markets may adversely affect our liquidity and capital resources and our business. If we are unable to pay quarterly dividends at intended levels, our reputation and stock price may be harmed. If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired and investors views of us could be harmed. Changes to accounting rules or regulations may adversely affect our operating results. Changes to estimates related to our property and equipment, including information technology systems, or operating results that are lower than our current estimates at certain store locations, may cause us to incur impairment charges. If we do not properly account for our unredeemed gift certificates, gift cards and merchandise credits, our operating results will be harmed. We may be exposed to risks and costs associated with credit card fraud and identity theft that could cause us to incur unexpected expenses and loss of revenue. Fluctuations in our tax obligations and effective tax rate may result in volatility of our operating results and stock price. If we fail to attract and retain key personnel, our business and operating results may be harmed.

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719955--4/1/2010--WILLIAMS_SONOMA_INC