Cabela's 2014 Annual Report Download - page 23

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Disruptions in our information technology systems could have a material adverse impact on our
operating results.
Our Retail, Direct, and Financial Services businesses are dependent upon the integrity, security, and
consistent operations of our information technology systems. We rely heavily on our information technology
systems to manage and replenish inventory, to take customer orders, to deliver products to our customers in an
efficient manner, to collect payments from our customers, and to provide accurate financial data and reporting
for our business. Although we continually maintain security measures to protect our information, any disruption,
failure, or breach of our information technology systems may have a material adverse effect on our business
or results of operations. We also expect to continue to make significant technology investments in the coming
years, which are key to our business. There are inherent risks associated with these system changes, and we may
be unable to successfully implement these system changes. Our failure to successfully implement these system
changes could have a material adverse effect on our business or results of operations. Additionally, there is no
assurance that successful implementation of these system changes will deliver value to us.
We are subject to security breaches and cybersecurity risks which could damage our reputation, result
in lost sales, and increase our costs in an effort to protect against such breaches and cybersecurity risks.
Our business necessarily depends upon the operation and security of our website. Additionally, the nature of
our business requires that we collect and maintain personal information about our customers. We use third-party
systems, software, and tools in order to protect the customer data we obtain through the course of our business,
which data includes financial and credit card information about our customers. Although we maintain security
measures to protect such customer information, security breaches, computer viruses, cyber attacks, acts of
vandalism, human error, or other similar events may result in the unauthorized disclosure and use of confidential
customer information. Such a security breach could attract substantial media attention, damage our reputation with
our customers, result in lost sales, expose us to monetary damages, fines, and litigation, and increase costs in order
to combat and prevent such breaches. Such a breach could have a material adverse impact on our business and
results of operations.
If we cannot successfully implement our retail store expansion strategy, our growth and profitability
would be adversely impacted.
We continue to seek additional locations to open new retail stores. Our ability to open new retail stores
in a timely manner and operate them profitably depends on a number of factors, many of which are beyond our
control, including:
x our ability to manage the financial and operational aspects of our retail growth strategy;
x our ability to identify suitable locations, including our ability to gather and assess demographic and
marketing data to determine consumer demand for our products in the locations we select;
x our ability to negotiate favorable lease agreements;
x our ability to properly assess the profitability of potential new retail store locations;
x the availability of financing on favorable terms;
x our ability to secure required governmental permits and approvals;
x our ability to hire and train skilled store operating personnel, especially management personnel;
x the availability of construction materials and labor and the absence of significant construction delays or
cost overruns;
x our ability to provide a satisfactory mix of merchandise that is responsive to the needs of our customers
living in the areas where new retail stores are built;
x our ability to supply new retail stores with inventory in a timely manner;
x our ability to properly assess operational and regulatory challenges involved in opening and successfully
operating retail stores in Canada;
x our competitors building or leasing stores near our retail stores or in locations we have identified as
targets for a new retail store;