801351--3/2/2009--WARNACO_GROUP_INC

related topics

{customer, product, revenue}

{operation, international, foreign}

{condition, economic, financial}

{property, intellectual, protect}

{product, market, service}

{cost, regulation, environmental}

{acquisition, growth, future}

{competitive, industry, competition}

{system, service, information}

{personnel, key, retain}

{control, financial, internal}

{cost, operation, labor}

{debt, indebtedness, cash}

{regulation, change, law}

The worldwide apparel industry is heavily influenced by general economic conditions. We have foreign currency exposures relating to buying, selling and financing in currencies other than the U.S. dollar, our functional currency. The apparel industry is subject to constantly changing fashion trends and if we misjudge consumer preferences, the image of one or more of our brands may suffer and the demand for our products may decrease. The apparel industry is subject to pricing pressures that may require us to lower the prices we charge for our products. The markets in which we operate are highly competitive and we may not be able to compete effectively. Increases in the prices of raw materials used to manufacture our products or increases in costs to transport our products could materially increase our costs and decrease our profitability. Shortages in the supply of sourced goods, difficulties encountered by the third parties that source certain of our products , or interruptions in our contracted production facilities or distribution operations could result in difficulty in procuring, producing and distributing our products. The failure of our suppliers or contractors to adhere to quality and production standards and the failure of our inspections to identify and correct such quality or production problems could have a material adverse effect on our business, financial condition and results of operations. We depend on a limited number of customers for a significant portion of our sales, and our financial success is linked to the success of our customers, our customers commitment to our products and our ability to satisfy and/or maintain our customers. Our success depends upon the continued protection of our trademarks and other intellectual property rights and we may be forced to incur substantial costs to maintain, defend, protect and enforce our intellectual property rights. A significant portion of our operations is dependent on license agreements with third parties that allow us to design, produce, source and market our products. Our success depends on the reputation of our owned and licensed brand names, including, in particular, Calvin Klein. We are subject to local laws and regulations in the U.S. and abroad. Changing international trade regulation may increase our costs and limit the amount of products or raw materials that we may import from or export to a given country. Our business outside of the U.S. exposes us to uncertain conditions in overseas markets. We are subject to certain risks as a result of our indebtedness. Our business depends on our senior management team and other key personnel. We rely significantly on information technology. Any inadequacy, interruption, integration failure or security failure of that technology could harm our ability to effectively operate our business. Fluctuations in the valuation of our pension plan s investments can have a negative effect on our financial condition and results of operations. Businesses that we may acquire may fail to perform to expectations. In addition, we may be unable to successfully integrate acquired businesses with our existing business. The restructuring activities that we engage in may not be successfully implemented and may have an adverse effect on our results of operations or financial condition. We have a history of restated financial statements and insufficient disclosure controls and procedures and internal control over financial reporting, the recurrence of which could impair our ability to provide timely and reliable financial information in the future and have a negative effect on our business and stock price.

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801351--3/2/2009--WARNACO_GROUP_INC_/DE/