CHRS » Topics » Financial Condition and Results of Operations

These excerpts taken from the CHRS 10-K filed Apr 1, 2009.
Financial Condition and Results of Operations below and elsewhere in this Report on Form 10-K, and in our other public filings.  The occurrence of one or more of these risks could also materially and adversely affect the price of our common stock.


RISKS RELATED TO OUR BUSINESS AND INDUSTRY

A continuing slowdown in the United States economy, an uncertain economic outlook, and escalating energy costs could lead to further reductions in consumer demand for our products in the future.

Consumer spending habits, including spending for our products, are affected by, among other things, prevailing economic conditions, levels of employment, salary levels, wage rates, availability of consumer credit, consumer confidence, fluctuating fuel and energy costs, and consumer perception of economic conditions.  Consumer discretionary spending, including purchases of women’s apparel, tends to decline during recessionary periods.  The continuing general slowdown in the United States economy, the global credit crisis, and an uncertain economic outlook have adversely affected consumer spending habits and customer traffic, which have contributed to a reduction in our net sales.  We cannot reliably predict the extent to which the current economic conditions will affect our business.  A prolonged economic downturn could have a material adverse effect on our business, financial condition, and results of operations.

Our business is dependent upon our ability to accurately predict rapidly changing fashion trends, customer preferences, and other fashion-related factors.

Customer tastes and fashion trends are volatile and tend to change rapidly, particularly for women's apparel.  Our success depends in part on our ability to effectively predict and respond to quickly changing fashion tastes and consumer demands, and to translate market trends into appropriate, saleable product offerings.  These risks may increase as we shift a higher proportion of our product from third-party vendors to internally-designed merchandise.  If we are unable to successfully implement our plans for the transformation of our brands to a vertical store model or successfully predict or respond to changing styles or trends and misjudge the market for our products or any new product lines, our sales will be lower and we may be faced with a substantial amount of unsold inventory or missed sales opportunities.  In response, we may be forced to rely on additional markdowns or promotional sales to dispose of excess or slow-moving inventory, which could have a material adverse effect on our business, financial condition, and results of operations.  This could also impact our reputation with our customers, which could diminish brand loyalty.

Existing and increased competition in the women's retail apparel and direct-to-consumer markets may reduce our net revenues, profits, and market share.

The women's specialty retail apparel and direct-to-consumer markets are highly competitive.  Our competitors include individual and chain fashion specialty stores, department stores, discount stores, catalog retailers, and Internet-based retailers.  As a result of this competition we are required to effectively market and competitively price our products to consumers in diverse markets, and we may experience pricing pressures, increased marketing expenditures, and loss of market share.  This could have a material adverse effect on our business, financial condition, and results of operations, including reduced sales and margins.



We believe that the principal bases upon which we compete are merchandise style, size, selection, fit, quality, display, price, attractive website layout, efficient fulfillment of website mail orders, and personalized service to our customers, as well as store location, design, advertising, and promotion.  Other women's apparel and direct-to-consumer companies with greater financial resources, marketing capabilities, or brand recognition may enter the plus-size business.  We cannot give assurance that we will be able to compete successfully against existing or future competitors.

Maintaining and improving our operating margins are dependent on our ability to successfully control our operating costs.

In order to maintain or improve our operating margins we need to successfully manage our operating costs.  Our inability to successfully manage labor costs, occupancy costs, or other operating costs, or our inability to take advantage of opportunities to reduce operating costs, could adversely affect our operating margins and our results of operations.  We are subject to the Fair Labor Standards Act and various state and Federal laws and regulations governing such matters as minimum wages, exempt status classification, overtime, and employee benefits.  Changes in Federal or state laws or regulations regarding minimum wages, unionization, or other employee benefits could cause us to incur additional wage and benefit costs, which could adversely affect our results of operations.  The finance charges on most of our proprietary credit card accounts are billed using a floating rate index, subject to a floor and limited by legal maximums.  Changes in legislation limiting interest rates and other credit card charges that can be billed on credit card accounts could negatively impact the operating margins of our credit operation.  In addition, we may be unable to obtain adequate insurance coverage for our operations at a reasonable cost.

We may be unable to attain the expected results of our cost-cutting initiatives.

In Fiscal 2009 we announced initiatives and actions designed to: streamline our business operations and further sharpen our focus on our core businesses, including the discontinuation of our LANE BRYANT WOMAN catalog and our
Financial Condition and Results of
Operations
below
and elsewhere in this Report on Form 10-K, and in our other public
filings.  The occurrence of one or more of these risks could also
materially and adversely affect the price of our common stock.





RISKS
RELATED TO OUR BUSINESS AND INDUSTRY



A
continuing slowdown in the United States economy, an uncertain economic outlook,
and escalating energy costs could lead to further reductions in consumer demand
for our products in the future.



Consumer
spending habits, including spending for our products, are affected by, among
other things, prevailing economic conditions, levels of employment, salary
levels, wage rates, availability of consumer credit, consumer confidence,
fluctuating fuel and energy costs, and consumer perception of economic
conditions.  Consumer discretionary spending, including purchases of
women’s apparel, tends to decline during recessionary periods.  The
continuing general slowdown in the United States economy, the global credit
crisis, and an uncertain economic outlook have adversely affected consumer
spending habits and customer traffic, which have contributed to a reduction in
our net sales.  We cannot reliably predict the extent to which the
current economic conditions will affect our business.  A prolonged
economic downturn could have a material adverse effect on our business,
financial condition, and results of operations.



Our
business is dependent upon our ability to accurately predict rapidly changing
fashion trends, customer preferences, and other fashion-related
factors.



Customer
tastes and fashion trends are volatile and tend to change rapidly, particularly
for women's apparel.  Our success depends in part on our ability to
effectively predict and respond to quickly changing fashion tastes and consumer
demands, and to translate market trends into appropriate, saleable product
offerings.  These risks may increase as we shift a higher proportion
of our product from third-party vendors to internally-designed
merchandise.  If we are unable to successfully implement our plans for
the transformation of our brands to a vertical store model or successfully
predict or respond to changing styles or trends and misjudge the market for our
products or any new product lines, our sales will be lower and we may be faced
with a substantial amount of unsold inventory or missed sales
opportunities.  In response, we may be forced to rely on additional
markdowns or promotional sales to dispose of excess or slow-moving inventory,
which could have a material adverse effect on our business, financial condition,
and results of operations.  This could also impact our reputation with
our customers, which could diminish brand loyalty.



Existing
and increased competition in the women's retail apparel and direct-to-consumer
markets may reduce our net revenues, profits, and market share.



The
women's specialty retail apparel and direct-to-consumer markets are highly
competitive.  Our competitors include individual and chain fashion
specialty stores, department stores, discount stores, catalog retailers, and
Internet-based retailers.  As a result of this competition we are
required to effectively market and competitively price our products to consumers
in diverse markets, and we may experience pricing pressures, increased marketing
expenditures, and loss of market share.  This could have a material
adverse effect on our business, financial condition, and results of operations,
including reduced sales and margins.






We
believe that the principal bases upon which we compete are merchandise style,
size, selection, fit, quality, display, price, attractive website layout,
efficient fulfillment of website mail orders, and personalized service to our
customers, as well as store location, design, advertising, and
promotion.  Other women's apparel and direct-to-consumer companies
with greater financial resources, marketing capabilities, or brand recognition
may enter the plus-size business.  We cannot give assurance that we
will be able to compete successfully against existing or future
competitors.



Maintaining
and improving our operating margins are dependent on our ability to successfully
control our operating costs.



In order
to maintain or improve our operating margins we need to successfully manage our
operating costs.  Our inability to successfully manage labor costs,
occupancy costs, or other operating costs, or our inability to take advantage of
opportunities to reduce operating costs, could adversely affect our operating
margins and our results of operations.  We are subject to the Fair
Labor Standards Act and various state and Federal laws and regulations governing
such matters as minimum wages, exempt status classification, overtime, and
employee benefits.  Changes in Federal or state laws or regulations
regarding minimum wages, unionization, or other employee benefits could cause us
to incur additional wage and benefit costs, which could adversely affect our
results of operations.  The finance charges on most of our proprietary
credit card accounts are billed using a floating rate index, subject to a floor
and limited by legal maximums.  Changes in legislation limiting
interest rates and other credit card charges that can be billed on credit
card accounts could negatively impact the operating margins of our credit
operation.  In addition, we may be unable to obtain adequate insurance
coverage for our operations at a reasonable cost.



We
may be unable to attain the expected results of our cost-cutting
initiatives.



In Fiscal
2009 we announced initiatives and actions designed to: streamline our business
operations and further sharpen our focus on our core businesses, including the
discontinuation of our LANE BRYANT WOMAN catalog and our
These excerpts taken from the CHRS 10-K filed Apr 2, 2008.
Financial Condition and Results of Operations below and elsewhere in this Report on Form 10-K and in our other public filings.  The occurrence of one or more of these risks could also materially and adversely affect the price of our common stock.


Financial Condition and Results of
Operations
below
and elsewhere in this Report on Form 10-K and in our other public
filings.  The occurrence of one or more of these risks could also
materially and adversely affect the price of our common stock.





"Financial Condition and Results of Operations" elsewhere:

Christopher & Banks (CBK)
CHILDRENS PLACE RETAIL STORES INC (PLCE)
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