Boot Barn Holdings Inc (BOOT) 2015年年度報告「NYSE」.pdf

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1、BOOT BARN HOLDINGS,INC.FORM 10-K(Annual Report)Filed 05/29/15 for the Period Ending 03/28/15 Address15776 LAGUNA CANYON ROADIRVINE,CA 92618Telephone949-453-4400CIK0001610250SymbolBOOTSIC Code5661-Shoe StoresFiscal Year03/31http:/www.edgar- Copyright 2015,EDGAR Online,Inc.All Rights Reserved.Distribu

2、tion and use of this document restricted under EDGAR Online,Inc.Terms of Use.Use these links to rapidly review the document TABLE OF CONTENTS Item 8.Consolidated Financial Statements and Supplementary Data Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 1

3、0-K Commission file number:001-36711 BOOT BARN HOLDINGS,INC.(Exact name of registrant as specified in its charter)15776 Laguna Canyon Rd.Irvine,CA 92618 (Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(949)453-4400 Securities registered pursuant to

4、Section 12(b)of the Act:Securities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes?No?Indicate by check mark if the registrant is not required to file reports pursuant to Sec

5、tion 13 or Section 15(d)of the Act.Yes?No?Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such re

6、ports),and(2)has been subject to such filing requirements for the past 90 days.Yes?No?Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulat

7、ion S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes?No?Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K(229.405 of this chapter)is not containe

8、d herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K?Delaware (State or other jurisdiction of incorporation or organization)90-0776290 (I.R.S.Em

9、ployer Identification No.)Title of each class Name of each exchange on which registered Common Stock,$0.0001 par value New York Stock Exchange(Mark One)?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 28,2015?TRANSITION REPORT PURSU

10、ANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See the definitions of large accelerated filer,acc

11、elerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes?No?As of September 26,2014,the last business day of the registrants most recently completed second fiscal quarter,t

12、here was no established public market for the registrants common stock.The registrants common stock began trading on The New York Stock Exchange on October 30,2014.The number of issued and outstanding shares of the registrants common stock,$.01 par value,as of May 27,2015 was 25,824,100.DOCUMENTS IN

13、CORPORATED BY REFERENCE Portions of the Registrants Proxy Statement for the 2015 Annual Meeting of Stockholders,to be filed pursuant to Regulation 14A within 120 days after the end of the 2015 fiscal year,are incorporated by reference into Part III of this Form 10-K.Large accelerated filer?Accelerat

14、ed filer?Non-accelerated filer?(Do not check if a smaller reporting company)Smaller reporting company?Table of Contents TABLE OF CONTENTS Page PART I Item 1.Business 3 Item 1A.Risk Factors 16 Item 1B.Unresolved Staff Comments 34 Item 2.Properties 34 Item 3.Legal Proceedings 35 Item 4.Mine Safety Dis

15、closures 35 PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 36 Item 6.Selected Consolidated Financial Data 38 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations 42 Item 7A.Quantitative

16、and Qualitative Disclosures About Market Risk 62 Item 8.Consolidated Financial Statements and Supplementary Data 63 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 100 Item 9A.Controls and Procedures 100 Item 9B.Other Information 100 PART III Item 10.Direc

17、tors,Executive Officers and Corporate Governance 101 Item 11.Executive Compensation 101 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 101 Item 13.Certain Relationships and Related Transactions,and Director Independence 101 Item 14.Principal Ac

18、counting Fees and Services 101 PART IV Item 15.Exhibits,Financial Statement Schedules 102 Table of Contents Forward-Looking Statements This annual report contains forward-looking statements that are subject to risks and uncertainties.All statements other than statements of historical or current fact

19、 included in this annual report are forward-looking statements.Forward-looking statements refer to our current expectations and projections relating to,by way of example and without limitation,our financial condition,liquidity,profitability,results of operations,margins,plans,objectives,strategies,f

20、uture performance,business and industry.You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts.These statements may include words such as anticipate,estimate,expect,project,plan,intend,believe,may,might,will,could,should,can have,likel

21、y and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events,but not all forward-looking statements contain these identifying words.For example,all statements we make relating to our estimated an

22、d projected earnings,revenues,costs,expenditures,cash flows,growth rates and financial results,our plans and objectives for future operations,growth or initiatives,strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements.We believe the risks att

23、ending any forward-looking statements include,but are not limited to,those described under Risk factors and include,among other things:declines in consumer confidence and decreases in consumer spending or changes in consumer preferences;our ability to successfully open a significant number of new st

24、ores and adapt to the preferences of new geographic markets in which those stores open;our ability to maintain and enhance a strong brand image;our ability to attract customers in the various retail venues and geographic markets in which our stores are currently located or in which we may open store

25、s in the future;our ability to compete effectively in an environment of intense competition;our ability to generate adequate cash from our existing stores to support our growth;our ability to effectively adapt to our rapid expansion in recent years and our planned future expansion;our ability to suc

26、cessfully integrate any new distribution model into our operations;our dependence on third-party suppliers to provide us with sufficient quantities of merchandise at acceptable prices;our ability to improve and expand our exclusive product offerings;our ability to balance our private brand merchandi

27、se with third-party branded merchandise;price reductions or inventory shortages resulting from failure to purchase the appropriate amount of inventory in advance of the season in which it will be sold;increases in the costs of fabrics,raw materials,labor or transportation;failure of our suppliers an

28、d their manufacturing sources to use acceptable labor or other practices;our inability to hire or retain key executive management and other talent required for our business;failure of our management information systems to support our current and growing business;1 Table of Contents our reliance upon

29、 third-party transportation providers for our e-commerce merchandise shipments;risks relating to our e-commerce website,such as diversion of traffic from our stores,liability for online content and government regulation of the Internet;disruptions in our internal operations or management information

30、 systems due to system security failures;litigation costs and the outcomes of litigation;the impact of changes in or violations of laws or regulations;our ability to manage strategic transactions that may impact our liquidity,increase our expenses and distract our management;and the possibility that

31、 our goodwill,intangible assets or long-lived assets might become impaired.We derive many of our forward-looking statements from our current operating budgets and forecasts,which are based upon detailed assumptions.While we believe that our assumptions are reasonable,we caution that it is very diffi

32、cult to predict the impact of known factors,and it is impossible for us to anticipate all factors that could affect our actual results.For these reasons,we caution readers not to place undue reliance on these forward-looking statements.See Risk Factors for a more complete discussion of the risks and

33、 uncertainties mentioned above and for a discussion of other risks and uncertainties.It is not possible for our management to predict all risks,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors,may cause actual results to differ m

34、aterially from those contained in any forward-looking statements we may make.All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this annual report and in our other SEC filings and public communications.

35、You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you.Furthermore,the forward-looking statements included in this annual re

36、port are made only as of the date hereof.Our forward-looking statements do not reflect the potential impact of any future acquisitions,mergers,dispositions,joint ventures or investments that we may make.We undertake no obligation to publicly update or revise any forward-looking statement as a result

37、 of new information,future events or otherwise,except as otherwise required by law.We operate on a fiscal calendar that results in a 52-or 53-week fiscal year ending on the last Saturday of March unless April 1st is a Saturday,in which case the fiscal year ends on April 1st.In a 52-week fiscal year,

38、each quarter includes 13 weeks of operations;in a 53-week fiscal year,the first,second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations.The data presented contains references to fiscal 2015,fiscal 2014,fiscal 2013 and the Successor Period

39、and the Predecessor Period,which represent our fiscal years ended March 28,2015,March 29,2014 and March 30,2013,and our fiscal periods from December 12,2011 to March 31,2012 and from April 3,2011 to December 11,2011,respectively.Fiscal 2015,2014 and 2013 were each 52-week periods,the Successor Perio

40、d consisted of approximately 16 weeks and the Predecessor Period consisted of approximately 36 weeks.2 Table of Contents PART I Item 1.Business.Our Company We are the largest and fastest-growing lifestyle retail chain devoted to western and work-related footwear,apparel and accessories in the U.S.Wi

41、th 169 stores in 26 states as of March 28,2015,we have over twice as many stores as our nearest direct competitor that sells primarily western and work wear,and believe we have the potential to grow our store base to at least 400 domestic locations.Our stores,which are typically freestanding or loca

42、ted in strip centers,average 10,748 square feet and feature a comprehensive assortment of approximately 200 brands and more than 1,500 styles on average,coupled with attentive,knowledgeable store associates.We target a broad and growing demographic,ranging from passionate western and country enthusi

43、asts to workers seeking dependable,high-quality footwear and clothing.We strive to offer an authentic,one-stop shopping experience that fulfills the everyday lifestyle needs of our customers and,as a result,many of our customers make purchases in both the western and work wear sections of our stores

44、.Our store environment,product offering and marketing materials represent the aesthetics of the true American West,country music and rugged,outdoor work.These threads are woven together in our motto,Be True,which communicates the genuine and enduring spirit of the Boot Barn brand.Our product offerin

45、g is anchored by an extensive selection of western and work boots and is complemented by a wide assortment of coordinating apparel and accessories.Many of the items that we offer are basics or necessities for our customers daily lives and typically represent enduring styles that are not impacted by

46、changing fashion trends.Accordingly,approximately 70%of our inventory is kept in stock through automated replenishment programs.The majority of our merchandise is sold at full price and is not subject to typical inventory markdowns.Our boot selection,which comprises approximately one-third of each s

47、tores selling square footage space,is merchandised on self-service fixtures with western boots arranged by size and work boots arranged by brand.This allows us to display the full breadth of our inventory and deliver a convenient shopping experience.We also carry market-leading assortments of denim,

48、western shirts,cowboy hats,belts and belt buckles,western-style jewelry and accessories.Our western assortment includes many of the industrys most sought-after brands,such as Ariat,Dan Post,Justin,Levi Strauss,Lucchese,Miss Me,Montana Silversmiths,Resistol and Wrangler.Our work assortment includes r

49、ugged footwear,outerwear,overalls,denim and shirts for the most physically demanding jobs where durability,performance and protection matter,including safety-toe boots and flame-resistant and high-visibility clothing.Among the top work brands sold in our stores are Carhartt,Dickies,Timberland Pro an

50、d Wolverine.Our merchandise is also available on our e-commerce website,.Boot Barn was founded in 1978 and,over the past 37 years,has grown both organically and through successful strategic acquisitions of competing chains.We have rebranded and remerchandised the acquired chains under the Boot Barn

51、banner,resulting in sales and profit increases over their original concepts.We believe that our business model and scale provide us with competitive advantages that have contributed to our consistent and strong financial performance,generating sufficient cash flow to support national growth.Recent A

52、cquisitions and Corporate Transactions Recapitalization On December 12,2011,we consummated a recapitalization with Freeman Spogli&Co.,which we refer to as the Recapitalization,to provide liquidity for certain existing stockholders,to repay existing indebtedness and to help us achieve our long-term g

53、rowth objectives by partnering with a private equity firm with expertise in assisting retail companies in executing their growth strategies.Funds affiliated 3 Table of Contents with Freeman Spogli&Co.purchased shares of our common stock representing an indirect 90.4%equity interest in our then-exist

54、ing subsidiary,Boot Barn Holding Corporation.In connection with the Recapitalization,management and other investors purchased shares of our common stock and common stock of Boot Barn Holding Corporation,collectively representing an indirect 9.6%equity interest in Boot Barn Holding Corporation.In add

55、ition,on December 12,2011,we entered into an amended and restated revolving credit facility and term loan facility and issued$25.0 million in mezzanine notes.The purchase price associated with the Recapitalization has been allocated to assets acquired and liabilities assumed based on their fair valu

56、es as of the date of the Recapitalization,which has resulted in the recognition of goodwill.RCC Acquisition On August 31,2012,we acquired RCC Western Stores,Inc.,a western and work-related retail chain of 29 stores located in 12 states(RCC).We refer to the acquisition as the RCC Acquisition.In conne

57、ction with the RCC Acquisition,we amended our revolving credit facility and our then-existing term loan facility to increase the size of both facilities.We also raised an additional$25.5 million by issuing new mezzanine notes and issued 296,725 shares of our common stock to one of our mezzanine lend

58、ers,which represented a 1.5%equity interest in Boot Barn Holding Corporation immediately following the RCC Acquisition.Upon the closing of the RCC Acquisition,we used borrowings under our revolving credit facility and our then-existing term loan facility,as well as the new mezzanine notes,to,among o

59、ther things,pay the cash portion of the acquisition consideration,as well as related fees and expenses incurred in connection with the RCC Acquisition.Commencing on August 31,2012,our consolidated financial statements include the financial position,results of operations and cash flows of RCC.The pur

60、chase price has been allocated to assets acquired and liabilities assumed based on their fair values as of the closing date of the RCC Acquisition,which has resulted in the recognition of goodwill.Through the RCC Acquisition,we increased our store base by 33%and expanded our geographic footprint int

61、o the Midwest and Southeast.In addition,we have achieved significant benefits from the RCC Acquisition as a result of improved purchasing efficiencies from suppliers and corporate support efficiencies.All of the RCC stores have been rebranded under the Boot Barn banner.Baskins Acquisition On May 25,

62、2013,we acquired Baskins Acquisition Holdings,LLC,a western and work-related retail chain of 30 stores located in Texas and Louisiana(Baskins).We refer to the acquisition as the Baskins Acquisition.In connection with the Baskins Acquisition,we amended our revolving credit facility to increase the si

63、ze of the facility to$60.0 million and entered into a new term loan facility.Upon the closing of the Baskins Acquisition,we used borrowings under our revolving credit facility and our term loan facility,to,among other things,pay the cash portion of the acquisition consideration,repay our then-existi

64、ng term loan facility and mezzanine notes,including prepayment penalties,and pay fees and expenses incurred in connection with the Baskins Acquisition.Commencing on May 25,2013,our consolidated financial statements and condensed consolidated financial statements include the financial position,result

65、s of operations and cash flows of Baskins.The purchase price has been allocated to assets acquired and liabilities assumed based on their fair values as of the closing date of the Baskins Acquisition,which has resulted in the recognition of goodwill.Through the Baskins Acquisition,we entered the att

66、ractive Texas market,which is the number one market for western boots,apparel and accessories.All of the Baskins stores have been rebranded under the Boot Barn banner and have been merchandised to be consistent with our existing stores.We have seen an increase in both sales and profitability in the

67、acquired stores since rebranding and remerchandising the stores acquired in the Baskins Acquisition.4 Table of Contents Reorganization As of June 8,2014,WW Top Investment Corporation held all of the outstanding shares of common stock of WW Holding Corporation,which held 95.0%of the outstanding share

68、s of common stock of Boot Barn Holding Corporation.Boot Barn Holding Corporation held all of the outstanding shares of common stock of Boot Barn,Inc.,which is our primary operating subsidiary.To simplify our organizational structure,we completed a reorganization on June 9,2014,whereby WW Holding Cor

69、poration was merged with and into WW Top Investment Corporation and then Boot Barn Holding Corporation was merged with and into WW Top Investment Corporation(the Reorganization).As a result of this Reorganization,Boot Barn,Inc.became a direct wholly owned subsidiary of WW Top Investment Corporation,

70、and the minority stockholders that formerly held 5.0%of Boot Barn Holding Corporation became holders of 5.0%of WW Top Investment Corporation.The legal name of WW Top Investment Corporation was subsequently changed to Boot Barn Holdings,Inc.Amendment of Certificate of Incorporation On October 19,2014

71、,our board of directors authorized the amendment of our certificate of incorporation to increase the number of shares that we are authorized to issue to 100,000,000 shares of common stock,par value$0.0001 per share.In addition,the amendment of the certificate of incorporation authorized us to issue

72、10,000,000 shares of preferred stock,par value$0.0001 per share,and effect a 25-for-1 stock split of our outstanding common stock.The amendment became effective on October 27,2014.Accordingly,all common share and per share amounts have been adjusted to reflect the increase in authorized shares and t

73、he 25-for-1 stock split as though it had occurred at the beginning of the initial period presented.Initial Public Offering On October 29,2014,we completed our initial public offering of 5,000,000 shares of our common stock.In addition,on October 31,2014,the underwriters of the initial public offerin

74、g exercised their option to purchase an additional 750,000 shares of common stock from us.As a result,5,750,000 shares of common stock were issued and sold by us at a price of$16.00 per share.Secondary Offering On February 25,2015,stockholders of the Company completed a secondary offering of 6,235,5

75、44 shares of common stock,including 813,332 shares of the Companys common stock sold as a result of the underwriters exercise of their option to purchase additional shares at the public offering price of$23.50 per share,less the underwriting discount.The Company did not issue any new shares of commo

76、n stock nor did it receive any proceeds from the secondary offering.Our Competitive Strengths We believe the following strengths differentiate us from our competitors and provide a solid foundation for future growth:Powerful lifestyle brand.The Boot Barn brand is built on western lifestyle values th

77、at are core to American culture.Our deep understanding of this lifestyle enables us to create long-lasting relationships with our customers who embody these ideals.Our brand is highly visible through our sponsorship of rodeos,stock shows,concerts and country music artists.We sponsor local community

78、rodeos,national rodeos and other country and western events.We sell our products through pop-up shops at several of the largest events that we sponsor.We believe these grassroots marketing efforts make our brand synonymous with the western lifestyle,validate our brands authenticity and establish Boo

79、t Barn as the trusted specialty retailer for all of our customers everyday needs.5 Table of Contents Fast growing specialty retailer of western and work wear in the U.S.Our broad geographic footprint,which currently spans 26 states and provides us with significant economies of scale,enhanced supplie

80、r relationships,the ability to recruit and retain high quality store associates and the ability to reinvest in our business at levels that we believe exceed those of our competition.Attractive,loyal customer base.Our customers come to us for many aspects of their everyday footwear and clothing needs

81、 because of the breadth and availability of our product offering.In fiscal 2011 we implemented our customer loyalty program,B Rewarded,to enhance our connection and relationship with our customers.Our loyalty program has grown rapidly since inception and includes approximately 2.8 million members wh

82、o have purchased merchandise from us.A vast majority of our sales are made to these customers.We leverage this database,which provides useful information about our customers,to enhance our marketing activities across our channels,refine our merchandising and planning efforts and assist in our select

83、ion of sites for new stores.Differentiated shopping experience.We deliver a one-stop shopping experience that engages our customers and,we believe,fulfills their lifestyle needs.Our stores are designed to create an inviting and engaging experience and include prominent storefront signage,a simple an

84、d easy-to-shop layout and a large and conveniently arranged self-service selection of boots.We offer significant inventory breadth and depth across a range of boots,apparel and accessories.We believe that our strong,long-lasting supplier relationships enhance our ability to provide a compelling merc

85、handise assortment with a strong in-stock position both in-store and online.Our knowledgeable store associates are passionate about our merchandise and deliver a high level of service to our customers.These elements help promote customer loyalty and drive repeat visits.Compelling merchandise assortm

86、ent and strategy.We believe we offer a diverse merchandise assortment that features the most sought-after western and work wear brands,well-regarded niche brands and exclusive private brands across a range of boots,apparel and accessories.We have a core assortment of styles that serves as a foundati

87、on for our merchandising strategy and we augment and tailor that assortment by region to cater to local preferences.In fiscal 2015,the vast majority of our merchandise sales were at full price,which,we believe,demonstrates the strength of our brand and the less discretionary nature of our product of

88、fering.Portfolio of exclusive private brands.We have leveraged our scale,merchandising experience and customer knowledge to launch a portfolio of private brands exclusive to us,including Shyanne,Cody James,Moonshine Spirit by Brad Paisley,American Worker,El Dorado and BB Ranch.Our private brands off

89、er high-quality western and work boots as well as apparel and accessories for men,ladies and kids.Each of our private brands,which address product and price segments that we believe are underserved by third-party brands,offers exclusive products to our customers and achieves better merchandise margi

90、ns.Customer receptivity and demand for our private brands has been strong,demonstrated by the private brands increasing penetration and significant sales momentum across our store base and online.Versatile store model with compelling unit economics.We have successfully opened and currently operate s

91、tores that generate strong cash flow,consistent store-level financial results and an attractive return on investment across a variety of geographies,markets,store sizes and location types.We successfully operate stores in markets characterized as agribusiness centers,ranch regions,oil and gas market

92、s,as well as in various geographies in the U.S.,such as California,the Southwest,the Midwest and the South.Our stores are successful in small,rural towns as well as major metropolitan areas,such as Houston,Los Angeles,Nashville and Phoenix.Our new store model requires an average net cash investment

93、of approximately$0.8 million and targets an average payback period of less than three years.Our lean operating structure,coupled with our strong supplier relationships,has allowed us to grow with minimal supply chain investments as most of our products ship directly from our suppliers to our stores.

94、We believe that our proven retail model 6 Table of Contents and attractive unit economics support our ability to grow our store footprint in both new and existing markets across the U.S.Highly experienced management team and passionate organization.Our senior management team has extensive experience

95、 across all key retail disciplines.With an average of approximately 25 years of experience in their respective functional areas,our senior management team has been instrumental in developing a robust and scalable infrastructure to support our growth.In addition to playing an important role in develo

96、ping our long-term growth initiatives,our senior management team embraces the genuine and enduring qualities of the western lifestyle and has created a positive culture of enthusiasm and entrepreneurial spirit which is shared by team members throughout our entire organization.Our strong company cult

97、ure is exemplified by the long tenure of our employees at all levels.For example,our district and regional managers have an average of eight years of service with us and our store managers have an average of more than five years of service with us,including the companies acquired by us.Our Growth St

98、rategies We are pursuing several strategies to continue our profitable growth,including:Expanding our store base.Driven by our compelling store economics,we believe that there is a significant opportunity to expand our store base in the U.S.Based on an extensive internal analysis,we believe that we

99、have the potential to grow our domestic store base from 169 stores as of March 28,2015 to at least 400 domestic locations.We currently plan to target new store openings in both existing markets and new,adjacent and underserved markets that we believe will be receptive to our concept.Over the past se

100、veral years,we have made significant investments in personnel,information technology,warehouse infrastructure and an e-commerce platform to support the expansion of our operations.Driving same store sales growth.We have delivered 22 consecutive quarters of positive same store sales growth and averag

101、ed same store sales growth of 6.6%during the last 13 full fiscal years.We believe that we can continue to grow our same store sales by increasing our brand awareness,driving additional traffic to our stores and increasing the amount of merchandise purchased by customers while visiting our stores.Our

102、 management team has launched several initiatives to accelerate growth,enhance our store associates selling skills,drive store-level productivity and increase customer engagement through our loyalty program.Enhancing brand awareness.We intend to enhance our brand awareness and customer loyalty in a

103、number of ways,such as continuing to grow our store base and our online and social media initiatives.We use broadcast media such as radio,television and outdoor advertisements to reach customers in new and existing markets.We also maintain our strong market position through our grassroots marketing

104、efforts,including sponsorship of rodeos,stock shows and other western industry events as well as our association with country music and partnerships with Brad Paisley as well as up-and-coming country musicians.We have an effective social media strategy with high customer engagement,as evidenced by o

105、ur Facebook fan base,which is approximately 2.3 million fans.Growing our e-commerce business.Our growing national footprint,expansive Facebook following and broader marketing efforts drive traffic to our e-commerce website.We continue to make investments aimed at increasing traffic to our e-commerce

106、 website,which reached over 8.3 million visits in fiscal 2015,and increasing the amount of merchandise purchased by customers who visit our website,while improving the shopping experience for our customers.Although our e-commerce sales accounted for only 4.2%of our net sales in fiscal 2015,our e-com

107、merce business allows us to reach customers outside our geographic footprint.We recently added an e-commerce portal to each of our store locations,offering our in-store customers an endless aisle with additional styles,colors and sizes not carried in stores or not currently in stock.7 Table of Conte

108、nts Leveraging our economies of scale.We believe that we have a variety of opportunities to increase the profitability of our business over time.Our ability to leverage our infrastructure and drive store-level productivity due to economies of scale is expected to be a primary driver of our improveme

109、nt in profitability.We intend to continually refine our merchandise mix and increase the penetration of our private brands to help differentiate us from our competitors and achieve higher merchandise margins.We also expect to capitalize on additional economies of scale in purchasing and sourcing as

110、we grow our geographic footprint and online presence.Our Market Opportunity We participate in the large,growing and highly fragmented western and work wear markets of the broader apparel and footwear industry.We offer a variety of boots,apparel and accessories that are basics or necessities for our

111、customers daily lives.Many of our customers are employed in the agriculture,oil and gas,manufacturing and construction industries,and are often country and western enthusiasts.We believe that growth in the western wear market has been and will continue to be driven by the growth of western events,su

112、ch as rodeos,the popularity of country music and the continued strength and endurance of the western lifestyle.We believe that growth in the work wear market has been and will continue to be driven by increasing activity in the construction sector and the return of domestic manufacturing.Additionall

113、y,government regulations for workplace safety have driven and,we believe,will continue to drive,sales in specific categories,such as safety-toe boots and flame-resistant and high-visibility clothing for various industrial and outdoor occupations.Our Sales Channels Our stores As a lifestyle retail co

114、ncept,our stores offer a broad array of merchandise to outfit an entire family,while working during the week,relaxing on the weekend,or dressing up for an evening out.Our stores are easy to navigate with clear sight lines to all major product categories.Our preferred store layout has ladies and chil

115、drens apparel on the right side of the store and mens western and mens work apparel on the left side.Our basic denim is usually merchandised on shelving placed on the exterior walls,while our premium-priced,more stylized denim and clothing are prominently displayed on floor fixtures and mannequins.W

116、e utilize the space in the front of the store for accessories such as hats,belts,jewelry,handbags,home merchandise,gifts and various impulse purchase items.Boots,our signature category,anchor the rear of the store with an expansive assortment displayed on fixtures up to six shelves in height.We offe

117、r virtually all of our boots in pairs out on the sales floor.To reflect the typical purchasing decision process of each of our customer segments,we arrange all western boots by size and all work boots by brand.While our knowledgeable and friendly store associates are readily available to assist our

118、customers,the store design facilitates a self-service shopping experience.Our stores are generally located in or near power and large neighborhood shopping centers with trade areas of five or more miles,and we have also successfully opened stores in malls and outlet center locations.Our stores gener

119、ally average 10,800 square feet and feature a comprehensive assortment of approximately 200 brands and more than 1,500 styles on average,coupled with attentive,knowledgeable store associates.On average,each of our stores typically has 10 full-and part-time employees,with our larger stores having ove

120、r 20 employees and smaller stores having as few as five employees.Our stores are designed and managed to drive profitability and,we believe,create a compelling customer shopping experience.As of March 28,2015,our retail footprint included 169 stores in the U.S.Two of our stores are operated under th

121、e American Worker name.Our American Worker stores primarily feature 8 Table of Contents work-related footwear,apparel and accessories.We do not currently intend to open additional American Worker stores.The following table shows the number of stores in each of the 26 states in which we operated as o

122、f March 28,2015: Our e-commerce website is a natural extension of our brand and in-store experience,allowing us to further build awareness in our current markets and to reach customers not served by our current geographic footprint.Our e-commerce platform is highly scalable and has exhibited strong

123、growth.During fiscal 2015,we had over 8.3 million visits to our website and we sold merchandise to customers in all 50 states.Approximately 3.7%of our e-commerce revenue for fiscal 2015 was generated from customers outside of the United States.Such foreign-source revenue constituted much less than 1

124、%of our overall net sales in fiscal 2015.Our growing national footprint and broader marketing efforts drive traffic to our e-commerce website,which in turn also drives traffic to our stores.We believe that many customers,especially those shopping for boots,browse online and then visit our stores to

125、make their purchases to ensure a proper fit.As a multi-channel retailer,we are implementing technology initiatives that integrate in-store and e-commerce platforms into one seamless customer experience.As an example,we recently added an e-commerce portal to each of our store locations,offering our i

126、n-store customers an endless aisle 9 State Number of stores Arizona 13 California 38 Colorado 9 Florida 4 Georgia 1 Idaho 3 Illinois 1 Indiana 1 Iowa 3 Kentucky 2 Louisiana 5 Minnesota 2 Missouri 1 Montana 4 Nevada 9 New Mexico 7 North Carolina 3 North Dakota 6 Oregon 3 South Carolina 1 South Dakota

127、 3 Tennessee 6 Texas 30 Utah 2 Wisconsin 1 Wyoming 11 Total 169 Table of Contents with additional styles,colors and sizes not carried in the store.In fiscal 2015,we enhanced customer service by improving real-time inventory sharing among our stores and e-commerce business.We also communicate informa

128、tion on current promotions and upcoming events on our e-commerce website,which helps drive purchases online and traffic to our stores.In fiscal 2015 we improved follow-up email communication related to order confirmation,offering boot care and other accessories associated with boot purchases as well

129、 as improving the cross-selling recommendations on the site.Store expansion opportunities and site selection We have substantial experience in opening stores in new geographic markets and as of March 28,2015 have successfully added,on a net basis,83 new stores through a combination of organic growth

130、 and strategic acquisitions since March 31,2012.We evaluate potential new locations in light of a variety of criteria,including local demographics and population,the areas industrial base,the existing competitive landscape,occupancy costs,store visibility,traffic,environmental considerations,co-tena

131、ncy and accessibility.We also consider a regions total store potential to help ensure efficiencies in store management and media spending.Most of our stores are in high-traffic and highly visible locations and many have freeway signage.Stores located in metropolitan areas are typically established i

132、n high-density neighborhoods,and stores located in rural areas are typically established near highways or major thoroughfares.Based on an extensive internal analysis of our current customer base,store performance drivers and competitor penetration,we believe that the U.S.market can support at least

133、400 locations.We utilized multiple methods for measuring market size,including a review of demographic and psychographic factors on a state-by-state basis.We supplemented that data by analyzing our share of the geographic markets in which we currently operate and extrapolating that share to new geog

134、raphic markets.Based on our market analysis,we have created a regional and state-by-state development plan to strategically extend our store portfolio.Careful consideration was given to operational constraints and merchandising differences in new and existing markets,while balancing the relevant ris

135、ks associated with opening stores in those markets.Over the past several years,we have invested in real estate and construction resources,information technology and warehouse infrastructure to support the expansion of our operations.In addition,we have developed a model for new stores that assumes a

136、 leased 8,000 to 12,000 square foot space,requires an average net cash investment of approximately$0.8 million and targets an average payback period of less than three years.We believe that under this model we can grow our store base by at least 10%annually over the next several years without substa

137、ntially modifying our current resources and infrastructure.Store Management and Training We have a strong culture focused on providing superior customer service.We believe that our store associates and managers form the foundation of the Boot Barn brand.We recruit people who are welcoming,friendly a

138、nd service-oriented,and who often live the western lifestyle or have a genuine affinity for it.We have a positive culture of enthusiasm and entrepreneurial spirit throughout the Company,which is particularly strong in our stores.Given the lifestyle nature of the Boot Barn brand,we have developed a n

139、atural connection between our customers and our store associates.The strength of our culture results in a store management team with more longevity and lower turnover than traditional specialty retail industry standards.On average,our store managers have an average of more than five years of service

140、.10 Table of Contents Given the importance of both fit and function in selling much of our product,we utilize a well-developed sales,service and product training program.We provide over 20 hours of training for new store associates,as well as ongoing product,sales and leadership training.Additionall

141、y,we provide home office and supplier-led workshops on products,selling skills and leadership at our annual three-day store manager meeting.Our store management training programs emphasize building skills that lead to effective store management and overall leadership.Our store managers are responsib

142、le for hiring and staffing our stores and are empowered with the sales,customer service and operational tools necessary to monitor employee and store performance.We believe that our continued investments in training our employees help drive loyalty from our store associates and,in turn,our customers

143、.We are committed to providing the right merchandise solution for each of our customers based on the ultimate end use of our products.Our goal is to train each of our store associates to be able to guide a customer throughout a store and provide helpful knowledge on product fit,functions and feature

144、s across our departments.Rather than rely heavily on sales commissions and supplier-specific incentive programs,we utilize a system under which the vast majority of a store associates compensation is based on an hourly wage.We believe that this produces a team-oriented culture,creates a less pressur

145、ed selling environment and helps ensure that our store associates are focused on the specific needs of our customers.Merchandising Strategy We seek to establish our stores as a one-stop destination for western and work-related footwear,apparel and accessories,with approximately 200 brands and more t

146、han 1,500 styles on average.Our merchandising strategy is to offer a core assortment of products,brands and styles by store,department and price point.We augment and tailor this assortment by region to cater to local preferences such as toe profiles for western boots,styling for western apparel,and

147、functions and features for work apparel and work boots depending on climate and the local industries served.In addition,we actively maintain a balance between third party brands and our own brands that,we believe,offers our customers a compelling mix between selection,product and value.Our business

148、is moderately seasonal and as a result our revenues fluctuate from quarter to quarter.The third quarter of our fiscal year,which includes the Christmas shopping season,has historically produced higher sales and disproportionately higher operating results than the other quarters of our fiscal year.Ho

149、wever,we believe that our sales throughout the year are more consistent than most other specialty retail chains.As a result of the dispersion of various western events throughout the year,we rely less on Christmas results than many other specialty retail chains.Historically,neither the western nor t

150、he work component of our business has been meaningfully impacted by fashion trends or seasonality.We believe that many of our customers are driven primarily by utility and brand,and our best-selling styles tend to be items that carry over from year to year with only minor updates.Over the last three

151、 fiscal years we have generated approximately 34%of our net sales during our third fiscal quarter,on average.We have a minimal amount of seasonal merchandise that could necessitate significant markdowns.This allows us to implement automated replenishment systems for approximately 70%of our merchandi

152、se,meaning that,as sales are captured in a stores point of sale system,recommended purchase orders are systematically generated for approval by our merchandising group,ensuring our strong in-stock inventory position.As a result,demand and margins for the majority of our products are fairly predictab

153、le which reduces our inventory risk.11 Table of Contents Our products During fiscal 2015,our products contributed to overall sales in the following manner:Gender:Mens merchandise accounted for approximately 60%of our sales with the balance being ladies,kids and unisex merchandise.Styling:Western sty

154、les comprised approximately 67%of our sales,with work-related and other styles making up the balance.Product category:Boots accounted for just over half of our sales,with apparel comprising an additional 32%and the balance consisting of hats,gifts,accessories and home merchandise.Throughout our long

155、 history we have maintained collaborative relationships with our key suppliers.These relationships,coupled with our scale,have allowed us to carry a wide selection of popular and niche brands,including Ariat,Carhartt Workwear,Cinch,Corral,Dan Post,Georgia Boot,Harley-Davidson,Justin Boots,Levi Strau

156、ss&Co.,Lucchese,Old Gringo,Rocky,Stetson,Timberland,Tony Lama,Wolverine and Wrangler.In many cases,we are one of the largest accounts of our suppliers and have become important as the largest specialty retailer of western and work wear in the U.S.As a result,we have several advantages relative to ou

157、r competitors,including increased buying power and access to first-to-market or limited edition products.This provides us with competitive differentiation and greater merchandise margins.Our scale has also allowed us to introduce our own proprietary western wear brands,Shyanne and Cody James,which o

158、ffer high-quality western boots,shirts,jackets and hats for women and men,respectively.We also have an exclusive license agreement with country music star Brad Paisley,who designs a collection of boots,apparel and accessories for us,Moonshine Spirit By Brad Paisley,that reflect his lifestyle and per

159、sonality.We also develop private brand merchandise for our work wear business under the name American Worker,and for our home and gift category under the name BB Ranch.We created these brands to address segments that we believe are underserved by third-party brands.We have a dedicated product develo

160、pment team that designs and sources merchandise from suppliers around the world.These product assortments are exclusive to Boot Barn and are merchandised and marketed as if they were third-party brands both in our stores and on our e-commerce website.In fiscal 2015,sales from our private brand produ

161、cts accounted for approximately 10%of our overall sales.These private brands differentiate us from our competitors and produce higher incremental merchandise margins than the third-party brands that we carry.Planning and allocation We believe that we have assembled a talented and experienced team in

162、 both the buying and merchandise planning functions.The experience of our team is critical to understanding the technical requirements of our merchandise based on region and use,such as the appropriate safety toe regulations for work boots in a particular industry.The team is constantly managing our

163、 replenishment model to ensure a high in-stock position by stock keeping unit,or SKU,on a store-by-store basis.Our merchandising team optimizes the product selection,mix and depth across our stores by analyzing demand on a market-by-market basis,continuously reviewing our sell-through results,commun

164、icating with our suppliers about local market preferences and new products,shopping our competitors stores,and immersing themselves in trade and western lifestyle events including rodeos,country music concerts and other industry-specific activities.Our merchandising team also makes frequent visits t

165、o our stores and partners with our regional,district and store managers to refine the merchandise assortment by region.Our team has demonstrated the ability to effectively manage merchandising,pricing and promotional strategies across our store base.To keep the product assortment fresh,we reposition

166、 a small portion of our merchandise on the sales floor every four to six weeks.To drive traffic to our stores and create in-store energy and 12 Table of Contents excitement,we execute a promotional calendar that showcases select brands or merchandise categories throughout the year and rotates on a m

167、onthly cadence.Our promotional activity also enables us to consistently engage with our customers both online and in-store,as well as through our various marketing media.While our promotional activity is important for customer engagement,the vast majority of our merchandise sales are at full price.I

168、n addition,we have the ability to optimize the price for each merchandise category on a market-by-market basis,which helps us to maximize profitability while remaining price competitive.Marketing and Advertising Our marketing strategy is designed to build brand awareness,acquire new customers,enhanc

169、e customer loyalty and drive in-store and online transactions.We customize our marketing mix for each of our markets and purposes.For example,for store grand openings we engage in additional local community outreach and advertise in local print media in select markets.We primarily use the following

170、forms of media:Radio and television We purchase spots on regional radio stations,primarily country music channels,to draw customers to nearby locations.We also maintain relationships with several country music artists in order to capitalize on the popularity of country music,using our stores and mar

171、keting communications to promote their album sales or concerts.In return,these country music artists often make in-store appearances or mention us on social media and occasionally give private performances.We have also started purchasing television spots to create awareness in new markets and occasi

172、onally help support grand openings of new stores.Direct mail We conduct several direct mail campaigns,sending out approximately 6.3 million mailers during fiscal 2015,which range in size from postcards to catalogs of nearly 80 pages.E-mail We e-mail our e-commerce customers and members of our B Rewa

173、rded loyalty program as part of our cross-channel effort to drive traffic to our stores and website.We sent approximately 350 million e-mails in fiscal 2015.Social media We also have a marketing strategy that has produced a fast-growing social media presence.We have approximately 2.3 million fans on

174、 Facebook.Our posts celebrate country and western life and humor,and routinely get thousands of likes,hundreds of shares and dozens of comments each.We maintain a social media presence in other key channels,including Instagram and Twitter.Event sponsorship We typically sponsor community-based,wester

175、n events each year within the regional footprint of our store locations.Houston Livestock Show and Rodeo,a well-known 20-day celebration of western heritage,is one of our most prominent sponsorships and attracts more than two million visitors to Houston,Texas,where we operate nine stores.Other promi

176、nent sponsorships include Cheyenne Frontier Days,the largest outdoor rodeo in the U.S.,the Professional Rodeo Cowboys Association and related National Finals Rodeo in Las Vegas,Nevada,Professional Bull Riders and the National High School Rodeo Association,which supports rodeos for competitors in hig

177、h school and junior high school.At more prominent events,we often set up pop-up shops as large as 9,000 square feet,which allows participants to purchase our merchandise.Distribution During fiscal 2015,our suppliers shipped approximately 91%of our in-store merchandise units directly to our stores an

178、d approximately 46%of our e-commerce merchandise units directly to our e-commerce customers.The remaining units were shipped from our 43,646 square foot distribution center that is located with our corporate headquarters in Irvine,California.Our distribution center is used to fulfill e-commerce orde

179、rs and to distribute our private brand purchases and bulk purchases to 13 Table of Contents our stores.In addition,our distribution center also helps to provide inventory for sponsored events and new store openings.In accordance with our automated replenishment programs,third-party suppliers typical

180、ly deliver merchandise to our stores daily,ensuring in-stock merchandise availability and a steady flow of new inventory for our customers.Competition The retail industry for western and work wear is highly fragmented and characterized by primarily regional competitors.We estimate that there are tho

181、usands of independent specialty stores scattered across the country.We believe that we compete primarily with smaller regional chains and independents on the basis of product quality,brand recognition,price,customer service and the ability to identify and satisfy consumer demand.However,we also comp

182、ete with farm supply stores,online retailers and,to a lesser degree,mass merchants,some of which are significantly larger than us,but most of which realize only a small percentage of their total revenues from the sale of western and work wear.We have more than twice as many stores as our nearest dir

183、ect competitor that sells primarily western and work wear and we believe that our nationally recognized lifestyle brand,economies of scale,breadth and depth of inventory across a variety of categories,strong in-stock position,portfolio of authentic private brands,enhanced supplier partnerships,exclu

184、sive offerings and ability to recruit and retain high quality store associates favorably differentiate us from our competitors.Properties Our e-commerce operations,corporate offices and distribution center are housed in four buildings in Irvine and Costa Mesa,California.Of the largest of these build

185、ings,our corporate offices account for 27,076 square feet and our distribution center accounts for the remaining 43,646 square feet.We have 119,905 square feet of additional warehouse space and 17,462 square feet of additional office space located in our other two buildings.Our distribution center a

186、nd additional warehouse space contain inventory to support our e-commerce operations,and provide staging and storage space to support our private brand initiatives,bulk purchasing programs,event sales and new store openings.We have extended the lease at our corporate offices through March 2016.We ha

187、ve also signed a 67 month lease for a 199,245-square-foot distribution center in Fontana,California.We expect to take possession of the property on or about August 1,2015 and will consolidate all of our warehouses and a portion of our current distribution center into this new distribution center.All

188、 of our stores are occupied under operating leases.The store leases generally have a base lease term of five or 10 years,with multiple renewal periods of five years,on average,exercisable at our option.Seventeen of our 169 store leases will reach their termination date during fiscal 2016,and none of

189、 these leases contain an option to automatically extend the lease term.We are generally responsible for the payment of property taxes and insurance,utilities and common area maintenance fees.Information technology We have made significant investments to create a scalable information technology platf

190、orm to support growth in our retail and e-commerce sales without further near-term investments in our information technology infrastructure.In 2008,we installed a new Enterprise Resource Planning system,which we refer to as Epicor Retail.We use this system for integrated point-of-sale,merchandising,

191、planning,sales audit,customer relationship management,inventory control,loss prevention,purchase order management and business intelligence.We operate Epicor Retail on a software-as-a-service platform.This approach allows us to regularly upgrade to the most recent software release with minimal opera

192、tional disruption,nominal systems infrastructure investment and with a relatively small in-house information technology department.Epicor Retail also interfaces with our accounting system,Microsoft Dynamics.14 Table of Contents Intellectual property We regard our trademarks as having value and as be

193、ing important to our marketing efforts.We have registered our trademarks in the U.S.,including our brand name Boot Barn and our private label brands.We have not sought foreign trademark protection because we do not actively conduct business outside of the U.S.We also own the domain name for our webs

194、ite,.Our policy is to pursue registration of our trademarks and to rigorously defend their infringement by third parties.Our employees As of March 28,2015,we employed approximately 800 full-time and 900 part-time employees,of which approximately 200 were employed at our corporate office and distribu

195、tion center and approximately 1,500 were employed at our stores.The number of employees,especially part-time employees,fluctuates depending upon our seasonal needs.None of our employees are represented by a labor union and we consider our relationship with our employees to be good.We have never expe

196、rienced a strike or significant work stoppage.Regulation and legislation We are subject to labor and employment laws,laws governing truth-in-advertising,privacy laws,safety regulations and other laws at the federal,state and local level,including consumer protection regulations,such as the Consumer

197、Product Safety Improvement Act of 2008,that regulate retailers and govern the promotion and sale of merchandise and the operation of stores and warehouse facilities.We monitor changes in these laws and believe that we are in material compliance with all applicable laws.We source many of our private

198、brand products from outside the U.S.The U.S.Foreign Corrupt Practices Act and other similar anti-bribery and anti-kickback laws and regulations generally prohibit companies and their intermediaries from making improper payments to non-U.S.officials for the purpose of obtaining or retaining business.

199、Our policies and our supplier compliance agreements mandate compliance with applicable law,including these laws and regulations.15 Table of Contents Item 1A.Risk Factors You should carefully consider the risks and uncertainties described below,together with all of the other information in this annua

200、l report,including our consolidated financial statements,and related notes included elsewhere in this annual report.If any of the following risks are realized,our business,operating results and prospects could be materially and adversely affected.In that event,the price of our common stock could dec

201、line,and you could lose part or all of your investment.Risks Related To Our Business Our sales could be severely impacted by declines in consumer confidence and decreases in consumer spending or by changes in consumer preferences.We depend upon consumers feeling confident about spending discretionar

202、y income on our products to drive our sales.Consumer spending may be adversely impacted by economic conditions,such as consumer confidence in future economic conditions,interest and tax rates,employment levels,salary and wage levels,general business conditions,the availability of consumer credit and

203、 the level of housing,energy and food costs.These risks may be exacerbated for retailers like us who focus on specialty footwear,apparel and accessories.Our financial performance is particularly susceptible to economic and other conditions in California and other western states where we have a signi

204、ficant number of stores.Our financial performance may also be susceptible to economic and other conditions relating to output and employment in the oil and gas industries,the construction sector,domestic manufacturing and the transportation and warehouse sectors because we believe that growth in the

205、se industries and sectors have driven the growth of our work wear business.In addition,our financial performance may be negatively affected if the popularity of the western and country lifestyle subsides,or if there is a general trend in consumer preferences away from boots and other western or coun

206、try products in favor of another general category of footwear or attire.If this were to occur or if periods of decreased consumer spending persist,our sales could decrease,which could have a material adverse effect on our financial condition and results of operations.Our continued growth depends upo

207、n successfully opening a significant number of new stores as well as integrating any acquired stores,and our failure to successfully open new stores or integrate acquired stores could negatively affect our business and stock price.We have grown our store count rapidly in recent years,both organicall

208、y and through strategic acquisitions of competing chains.However,we must continue to open and operate new stores to help maintain our revenue and profit growth.Our ability to successfully open and operate new stores is subject to a variety of risks and uncertainties,such as:identifying suitable stor

209、e locations,the availability of which is beyond our control;obtaining acceptable lease terms;sourcing sufficient levels of inventory;selecting the appropriate merchandise to appeal to our customers;hiring,training and retaining store employees;assimilating new store employees into our corporate cult

210、ure;marketing the new stores locations and product offerings effectively;avoiding construction delays and cost overruns in connection with the build out of new stores;avoiding other costs in opening new stores,such as rebranding acquired locations and environmental liabilities;16 Table of Contents m

211、anaging and expanding our infrastructure to accommodate growth;and integrating the new stores with our existing buying,distribution and other support operations.Our failure to successfully address these challenges could have a material adverse effect on our financial condition and results of operati

212、ons.We opened or acquired 33 stores in fiscal 2013,39 stores in fiscal 2014 and 18 stores in fiscal 2015.We plan to open at least 22 new stores in fiscal 2016.However,there can be no assurance that we will open the planned number of new stores in fiscal 2016 or thereafter,or that any such stores wil

213、l be profitable.This expansion will place increased demands on our operational,managerial and administrative resources.These increased demands could cause us to operate our existing business less effectively,which in turn could cause the financial performance of our existing stores to deteriorate.In

214、 addition,we currently plan to open some new stores within existing markets.Some of these new stores may open close enough to our existing stores that a segment of customers will stop shopping at our existing stores and instead shop at the new stores,causing sales and profitability at those existing

215、 stores to decline.If this were to occur with a number of our stores,this could have a material adverse effect on our financial condition and results of operations.In addition to opening new stores,we may acquire stores.Acquiring and integrating stores involves additional risks that could adversely

216、affect our growth and results of operation.Newly acquired stores may be unprofitable and we may incur significant costs and expenses in connection with any acquisition including in remerchandising and rebranding the acquired stores.Integrating newly acquired stores may divert our senior managements

217、attention from our core business.Our ability to integrate newly acquired stores will depend on the successful expansion of our existing financial controls,distribution model,information systems,management and human resources and on attracting,training and retaining qualified employees.Our business l

218、argely depends on a strong brand image,and if we are unable to maintain and enhance our brand image,particularly in new markets where we have limited brand recognition,we may be unable to increase or maintain our level of sales.We believe that our brand image and brand awareness has contributed sign

219、ificantly to the success of our business.We also believe that maintaining and enhancing our brand image,particularly in new markets where we have limited brand recognition,is important to maintaining and expanding our customer base.Our ability to successfully integrate new stores into their surround

220、ing communities,to expand into new markets or to maintain the strength and distinctiveness of our brand image in our existing markets will be adversely impacted if we fail to connect with our target customers.Maintaining and enhancing our brand image may require us to make substantial investments in

221、 areas such as merchandising,marketing,store operations,community relations,store graphics and employee training,which could adversely affect our cash flow and which may ultimately be unsuccessful.Furthermore,our brand image could be jeopardized if we fail to maintain high standards for merchandise

222、quality,if we fail to comply with local laws and regulations or if we experience negative publicity or other negative events that affect our image and reputation.Some of these risks may be beyond our ability to control,such as the effects of negative publicity regarding our suppliers.Failure to succ

223、essfully market and maintain our brand image in new and existing markets could harm our business,results of operations and financial condition.Our failure to adapt to new challenges that arise when expanding into new geographic markets could adversely affect our ability to profitably operate those s

224、tores and maintain our brand image.Our expansion into new geographic markets could result in competitive,merchandising,distribution and other challenges that are different from those we encounter in the geographic markets in which we currently operate.In addition,as the number of our stores increase

225、s,we may face risks associated with market saturation of our product offerings and locations.Our suppliers may also 17 Table of Contents restrict their sales to us in new markets to the extent they are already saturating that market with their products through other retailers or their own stores.The

226、re can be no assurance that any newly opened stores will be received as well as,or achieve net sales or profitability levels comparable to those of,our existing stores in the time periods estimated by us,or at all.If our stores fail to achieve,or are unable to sustain,acceptable net sales and profit

227、ability levels,our business may be materially harmed,we may incur significant costs associated with closing those stores and our brand image may be negatively impacted.We face intense competition in our industry and we may be unable to compete effectively.The retail industry for western and work wea

228、r is highly fragmented and characterized by primarily regional competitors.We estimate that there are thousands of independent specialty stores scattered across the country.We believe that we compete primarily with smaller regional chains and independents on the basis of product quality,brand recogn

229、ition,price,customer service and the ability to identify and satisfy consumer demand.However,we also compete with farm supply stores,online retailers and,to a lesser degree,mass merchants.Competition with some or all of these retailers could require us to lower our prices or risk losing customers.In

230、 addition,significant or unusual promotional activities by our competitors may force us to respond in-kind and adversely impact our operating cash flow.As a result of these factors,current and future competition could have a material adverse effect on our financial condition and results of operation

231、s.Many of the mass merchants that sell some western or work wear products have greater financial,marketing and other resources than we currently do,and therefore may be able to devote greater resources to the marketing and sale of these products,generate national brand recognition or adopt more aggr

232、essive pricing policies than we can,which would put us at a competitive disadvantage if they decide to expand their offerings of these product lines.Moreover,we do not possess exclusive rights to many of the elements that comprise our in-store experience and product offerings.Our competitors may see

233、k to emulate facets of our business strategy and in-store experience,which could result in a reduction of some competitive advantages or special appeal that we might possess.In addition,most of our suppliers sell products to us on a non-exclusive basis.As a result,our current and future competitors

234、may be able to duplicate or improve on some or all of the product offerings that we believe are important in differentiating our stores and our customers shopping experience.If our competitors were to duplicate or improve on some or all of our in-store experience or product offerings,our competitive

235、 position and our business could suffer.We depend on cash generated from our existing store operations to support our growth,which could strain our cash flow.We primarily rely on cash flow generated from existing stores to fund our current operations and our growth.It typically takes several months

236、and a significant amount of cash to open a new store.For example,our new store model requires an average net cash investment of approximately$0.8 million.If we continue to open a large number of stores relatively close in time,the cost of these store openings and the cost of continuing operations co

237、uld reduce our cash position.An increase in our net cash outflow for new stores could adversely affect our operations by reducing the amount of cash available to address other aspects of our business.In addition,as we expand our business,we will need significant amounts of cash from operations to pa

238、y our existing and future lease obligations,build out new store space,purchase inventory,pay personnel,pay for the increased costs associated with operating as a public company and,if necessary,further invest in our infrastructure and facilities.If our business does not generate sufficient cash flow

239、 from operations to fund these activities,and sufficient funds are not otherwise available from our new credit facility or future credit facilities,we may need additional equity or debt financing.If such financing is not available to us on satisfactory terms,our ability to operate and expand our bus

240、iness or 18 Table of Contents to respond to competitive pressures would be limited and we could be required to delay,curtail or eliminate planned store openings.Moreover,if we raise additional capital by issuing equity securities or securities convertible into equity securities,your ownership may be

241、 diluted.Any debt financing we may incur may impose covenants that restrict our operations,and will require interest payments that would create additional cash demands and financial risk for us.We have expanded rapidly in recent years and have limited operating experience at our current size.We have

242、 significantly expanded our operations in the last three years,increasing our locations from 85 stores in eight states as of March 31,2012 to 169 stores in 26 states as of March 28,2015.If our operations continue to grow,we will be required to expand our sales,marketing and support services and our

243、administrative personnel,and we may decide to change our distribution model.This expansion could increase the strain on our existing resources,causing operational difficulties such as difficulties in hiring,obtaining adequate levels of merchandise,delayed shipments and decreased levels of customer s

244、ervice.These difficulties could cause our brand image to deteriorate and lead to a decrease in our revenues and income and the price of our common stock.Any significant change in our distribution model could initially have an adverse impact on our cash flows and results of operations.During fiscal 2

245、015,our suppliers shipped approximately 91%of our in-store merchandise units directly to our stores and approximately 46%of our e-commerce merchandise units directly to our e-commerce customers.In the future,as part of our long-term strategic planning,we may change our distribution model to increase

246、 the amount of merchandise that we self-distribute through a centralized distribution center.We recently hired a leading supply chain consulting firm to study our current network,supplier structure and likely sources of growth and to recommend an optimal distribution model for our future operations.

247、Changing our distribution model to increase distributions from a centralized distribution center to our stores and customers would initially involve significant capital expenditures,which would increase our borrowings and interest expense or temporarily reduce the rate at which we open new stores.In

248、 addition,if we are unable to successfully integrate a new distribution model into our operations in a timely manner,our supply chain could experience significant disruptions,which could reduce our sales and adversely impact our results of operations.If we fail to maintain good relationships with ou

249、r suppliers or if our suppliers are unable or unwilling to provide us with sufficient quantities of merchandise at acceptable prices,our business and operations may be adversely affected.Our business is largely dependent on continued good relationships with our suppliers,including suppliers for our

250、third-party branded products and manufacturers for our private brand products.During fiscal 2015,merchandise purchased from our top three suppliers accounted for approximately 20%,10%and 10%of our sales.We operate on a purchase order basis for our private brand and third-party branded merchandise an

251、d do not have long-term written agreements with our suppliers.Accordingly,our suppliers can refuse to sell us merchandise,limit the type or quantity of merchandise that they sell to us,enter into exclusivity arrangements with our competitors or raise prices at any time,which could have an adverse im

252、pact on our business.Deterioration in our relationships with our suppliers could have a material adverse impact on our business,and there can be no assurance that we will be able to acquire desired merchandise in sufficient quantities on terms acceptable to us in the future.Also,some of our supplier

253、s sell products directly from their own retail stores or e-commerce websites,and therefore directly compete with us.These suppliers may decide at some point in the future to discontinue supplying their merchandise to us,supply us less desirable merchandise or raise prices on the products they do sel

254、l us.If we lose key suppliers and are unable to find alternative 19 Table of Contents suppliers to provide us with substitute merchandise for lost products,our business may be adversely affected.Our plans to improve and expand our exclusive product offerings may be unsuccessful,and implementing thes

255、e plans may divert our operational,managerial,financial and administrative resources,which could harm our competitive position and reduce our revenue and profitability.In addition to our store expansion strategy,we currently plan to grow our business by improving and expanding our exclusive product

256、offerings,which includes introducing new brands and growing and expanding our existing brands.The principal risks to our ability to successfully carry out our plans to improve and expand our product offering are that:introduction of new products may be delayed,which may allow our competitors to intr

257、oduce similar products in a more timely fashion,which could hinder our ability to be viewed as the exclusive provider of certain western and work apparel brands and items;the third-party suppliers of our exclusive product offerings may not maintain adequate controls with respect to product specifica

258、tions and quality,which may lead to costly corrective action and damage to our brand image;if our expanded exclusive product offerings fail to maintain and enhance our distinctive brand identity,our brand image may be diminished and our sales may decrease;and implementation of these plans may divert

259、 our managements attention from other aspects of our business and place a strain on our operational,managerial,financial and administrative resources,as well as our information systems.In addition,our ability to successfully improve and expand our exclusive product offerings may be affected by econo

260、mic and competitive conditions,changes in consumer spending patterns and changes in consumer preferences.These plans could be abandoned,cost more than anticipated and divert resources from other areas of our business,any of which could impact our competitive position and reduce our revenue and profi

261、tability.Any inability to balance our private brand merchandise with the third-party branded merchandise that we sell may have an adverse effect on our net sales and gross margin.Our private brand merchandise represented approximately 10%of our net sales in fiscal 2015.Our private brand merchandise

262、generally has a higher gross margin than the third-party branded merchandise that we offer.As a result,we intend to attempt to increase the penetration of our private brands in the future.However,carrying our private brands limits the amount of third-party branded merchandise we can carry and,theref

263、ore,there is a risk that our customers perception that we offer many major brands will decline or that our suppliers of third-party branded merchandise may decide to discontinue supplying,or reduce the supply of,their merchandise.If this occurs,it could have a material adverse effect on net sales an

264、d profitability.We purchase merchandise based on sales projections and our purchase of too much or too little inventory may adversely affect our overall profitability.We must actively manage our purchase of inventory.We generally order our seasonal and private brand merchandise several months in adv

265、ance of it being received and offered for sale.If there is a significant decrease in demand for these products or if we fail to accurately predict consumer demand,including by disproportionately increasing the penetration of our private brand merchandise,we may be forced to rely on markdowns or prom

266、otional sales to dispose of excess inventory.This could have an adverse effect on our margins and operating income.Conversely,if we fail to purchase a sufficient quantity of merchandise,we may not have an adequate supply of products to meet consumer demand,20 Table of Contents thereby causing us to

267、lose sales or adversely affecting our customer relationships.Any failure on our part to anticipate,identify and respond effectively to changing consumer demand and consumer shopping preferences could adversely affect our results of operations.A rise in the cost of fabrics and raw materials or the co

268、st of labor and transportation could increase our cost of merchandise and cause our results of operations and margins to decline.Fluctuations in the price,availability and quality of fabrics and raw materials,such as cotton and leather,that our suppliers use to manufacture our products,as well as th

269、e cost of labor and transportation,could have adverse impacts on our cost of merchandise and our ability to meet our customers demands.In particular,because key components of our products are cotton and leather,any increases in the cost of cotton or leather may significantly affect the cost of our p

270、roducts and could have an adverse impact on our cost of merchandise.We may be unable to pass all or any of these higher costs on to our customers,which could have a material adverse effect on our profitability.Most of our merchandise is produced in foreign countries,making the price and availability

271、 of our merchandise susceptible to international trade risks and other international conditions.Many of our private brand products are manufactured in foreign countries.In addition,we purchase most of our third-party branded merchandise from domestic suppliers that have a majority of their merchandi

272、se made in foreign countries.Some foreign countries can be,and have been,affected by political and economic instability,public health emergencies and natural disasters,negatively impacting trade.The countries in which our merchandise currently is manufactured or may be manufactured in the future cou

273、ld become subject to trade restrictions imposed by the U.S.or other foreign governments.Trade restrictions,including increased tariffs or quotas,embargoes and customs restrictions,against apparel items,as well as U.S.or foreign labor strikes,work stoppages or boycotts,could increase the cost or redu

274、ce the supply of apparel available to us and have a material adverse effect on our business,financial condition and results of operations.In addition,our merchandise supply could be impacted if our suppliers imports become subject to existing or future duties and quotas,or if our suppliers face incr

275、eased competition from other companies for production facilities,import quota capacity or shipping capacity.Any increase in the cost of our merchandise or limitation on the amount of merchandise we are able to purchase could have a material adverse effect on our financial condition and results of op

276、erations.In addition,there is a risk that our suppliers could fail to comply with applicable regulations,which could lead to investigations by U.S.or foreign government agencies responsible for international trade compliance.Resulting penalties or enforcement actions could delay future imports or ex

277、ports or otherwise negatively affect our business.If our suppliers and manufacturers fail to use acceptable labor or other practices,our reputation may be harmed,which could negatively impact our business.We purchase merchandise from independent third-party suppliers and manufacturers.If any of thes

278、e suppliers have practices that are not legal or accepted in the U.S.,consumers may develop a negative view of us,our brand image could be damaged and we could become the subject of boycotts by our customers or interest groups.Further,if the suppliers violate labor or other laws of their own country

279、,these violations could cause disruptions or delays in their shipments of merchandise.For example,much of our merchandise is manufactured in China and Mexico,which have different labor practices than the U.S.We do not independently investigate whether our suppliers are operating in compliance with a

280、ll applicable laws and therefore we rely upon the suppliers representations set forth in our purchase orders and supplier agreements concerning the suppliers compliance with such laws.If our goods are manufactured using illegal or unacceptable labor practices in these countries,or other countries fr

281、om which our suppliers source the products we purchase,our ability to supply merchandise 21 Table of Contents for our stores without interruption,our brand image and,consequently,our sales may be adversely affected.If we lose key management personnel,our operations could be negatively impacted.We de

282、pend upon the leadership and experience of our executive management team.If we are unable to retain existing management personnel who are critical to our success,it could result in harm to our supplier and employee relationships,the loss of key information,expertise or know-how and unanticipated rec

283、ruitment and training costs.The loss of the services of any of our key management personnel could have a material adverse effect on our business and prospects,and could be viewed negatively by investors and analysts,which could cause the price of our common stock to decline.We may be unable to find

284、qualified individuals to replace key management personnel on a timely basis,without incurring increased costs or at all.We do not intend to purchase key person life insurance covering any employee.If we lose the services of any of our key management personnel or we are unable to attract additional q

285、ualified personnel,we may be unable to successfully manage our business.If we cannot attract,train and retain qualified employees,our business could be adversely affected.Our success depends upon the quality of the employees we hire.We recruit people who are welcoming,friendly and service-oriented,a

286、nd who often live the western lifestyle or have a genuine affinity for it.Employees in many positions must have knowledge of our merchandise and the skill necessary to excel in a customer service environment.The turnover rate in the retail industry is typically high and finding qualified candidates

287、to fill positions may be difficult.Our planned growth will require us to hire and train even more personnel.If we cannot attract,train and retain corporate employees,district managers,store managers and store associates with the qualifications we deem necessary,our ability to effectively operate and

288、 expand may be adversely affected.In addition,we rely on temporary and seasonal personnel to staff our distribution center.We cannot guarantee that we will be able to find adequate temporary or seasonal personnel to staff our operations when needed,which may strain our existing personnel and negativ

289、ely impact our operations.The concentration of our stores and operations in certain geographic locations subjects us to regional economic conditions and natural disasters that could adversely affect our business.Our corporate headquarters and distribution center are in a single location in Irvine,Ca

290、lifornia.If we encounter any disruptions to our operations at this building or if it were to shut down for any reason,including due to fire or other natural disaster,then we may be prevented from effectively operating our stores and our e-commerce business.Furthermore,the risk of disruption or shutd

291、own at this building is greater than it might be if it were located in another region,as southern California is prone to natural disasters such as earthquakes and wildfires.Any disruption or shutdown at this location could significantly impact our operations and have a material adverse effect on our

292、 financial condition and results of operations.In addition,most of the 169 stores that we operated as of March 28,2015 were concentrated in the western U.S.,with 81 of those stores located in Arizona,California and Texas.The geographic concentration of our stores may expose us to economic downturns

293、in those states where our stores are located.For example,a recession in any area where we own several stores could adversely affect our ability to generate or increase operating revenues.In addition,our stores located in North Dakota and surrounding areas are likely to be adversely impacted by the r

294、ecent economic downturn affecting the oil and gas industry.Any negative impact upon or disruption to the operations of stores in these states could have a material adverse effect on our financial condition and results of operations.22 Table of Contents We are required to make significant lease payme

295、nts for our stores,corporate headquarters and distribution center,which may strain our cash flow.We do not own any real estate.Instead,we lease all of our retail store locations as well as our corporate headquarters and distribution center.The store leases generally have a base lease term of five or

296、 10 years,with multiple renewal periods of five years,on average,exercisable at our option.Many of our leases have early cancelation clauses which permit us to terminate the lease if certain sales thresholds are not met in certain periods of time.Our costs under these leases are a significant amount

297、 of our expenses and are growing rapidly as we expand the number of locations and the cost of leasing existing locations rises.In fiscal 2015,our total operating lease expense was$27.3 million,and we expect this amount to continue to increase as we open more stores.We are required to pay additional

298、rent under many of our lease agreements based upon achieving certain sales thresholds for each store location.We are generally responsible for the payment of property taxes and insurance,utilities and common area maintenance fees.Many of our lease agreements also contain provisions which increase th

299、e rent payments on a set time schedule,causing the cash rent paid for a location to escalate over the term of the lease.In addition,rent costs could escalate when multi-year leases are renewed at the expiration of their lease term.These costs are significant,recurring and increasing,which places a c

300、onsistent strain on our cash flow.We depend on cash flows from operations to pay our lease expenses and to fulfill our other cash needs.If our business does not generate sufficient cash flows from operating activities,and sufficient funds are not otherwise available to us from borrowings under our n

301、ew credit facility,future credit facilities or from other sources,we may be unable to service our operating lease expenses,grow our business,respond to competitive challenges or to fund our other liquidity and capital needs,which would harm our business.Additional sites that we lease are likely to b

302、e subject to similar long-term leases.If an existing or future store is not profitable,and we decide to close it,we may nonetheless be committed to perform our obligations under the applicable lease including,among other things,paying the base rent for the balance of the lease term.We may fail to id

303、entify suitable store locations,the availability of which is beyond our control,to replace such closed stores.In addition,as our leases expire,we may fail to negotiate renewals,either on commercially acceptable terms or at all,which could cause us to close stores in desirable locations.Seventeen of

304、our 169 store leases will reach their termination date during fiscal 2016,and none of these leases contain an option to automatically extend the lease term.If we are unable to enter into new leases or renew existing leases on terms acceptable to us or be released from our obligations under leases fo

305、r stores that we close,our business,profitability and results of operations may be harmed.We may be unable to maintain same store sales or net sales per square foot,which may cause our results of operations to decline.The investing public may use same store sales or net sales per square foot project

306、ions or results,over a certain period of time,such as on a quarterly or yearly basis,as an indicator of our profitability growth.See Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operation for further discussion of same store sales.Our same store sales can vary sig

307、nificantly from period to period for a variety of reasons,such as the age of stores,changing economic factors,unseasonable weather,pricing,the timing of the release of new merchandise and promotional events and increased competition.These factors could cause same store sales or net sales per square

308、foot to decline period to period or fail to grow at expected rates,which could adversely affect our results of operations and cause the price of our common stock to be volatile during such periods.23 Table of Contents If our management information systems fail to operate or are unable to support our

309、 growth,our operations could be disrupted.We rely upon our management information systems in almost every aspect of our daily business operations.For example,our management information systems serve an integral part in enabling us to order merchandise,process merchandise at our distribution center a

310、nd retail stores,perform and track sales transactions,manage personnel,pay suppliers and employees,operate our e-commerce business and report financial and accounting information to management.In addition,we rely on our management information systems to enable us to leverage our costs as we grow.If

311、our management information systems fail to operate or are unable to support our growth,our store operations and e-commerce business could be severely disrupted,and we could be required to make significant additional expenditures to remediate any such failure.We rely on UPS and the United States Post

312、al Service to deliver our e-commerce merchandise to our customers and our business could be negatively impacted by disruptions in the operations of these third-party service providers.We rely on UPS and the United States Postal Service to deliver our e-commerce merchandise to our customers.Relying o

313、n these third-party delivery services puts us at risk from disruptions in their operations,such as employee strikes,inclement weather and their inability to meet our shipping demands.If we are forced to use other delivery services,our costs could increase and we may be unable to meet shipment deadli

314、nes.Moreover,we may be unable to obtain terms as favorable as those received from the transportation providers we currently use,which would further increase our costs.In addition,if our products are not delivered to our customers on time,our customers may cancel their orders or we may lose business

315、from these customers in the future.These circumstances may negatively impact our financial condition and results of operations.Use of social media may adversely impact our reputation or subject us to fines or other penalties.There has been a substantial increase in the use of social media platforms,

316、including blogs,social media websites and other forms of Internet-based communication,which allow individuals access to a broad audience of consumers and other interested persons.Negative commentary regarding us or the brands that we sell may be posted on social media platforms or similar devices at

317、 any time and may harm our reputation or business.Consumers value readily available information concerning retailers and their goods and services and often act on such information without further investigation and without regard to its accuracy.The harm may be immediate without affording us an oppor

318、tunity for redress or correction.In addition,social media platforms provide users with access to such a broad audience that collective action against our stores,such as boycotts,can be more easily organized.If such actions were organized,we could suffer reputational damage as well as physical damage

319、 to our stores and merchandise.We also use social media platforms as marketing tools.For example,we maintain Facebook,Instagram and Twitter accounts.As laws and regulations rapidly evolve to govern the use of these platforms and devices,the failure by us,our employees or third parties acting at our

320、direction to abide by applicable laws and regulations in the use of these platforms and devices could adversely impact our business,financial condition and results of operations or subject us to fines or other penalties.Our e-commerce business subjects us to numerous risks that could have an adverse

321、 effect on our results of operations.Our e-commerce business and its continued growth subject us to certain risks that could have an adverse effect on our results of operations,including:diversion of traffic from our stores;24 Table of Contents liability for online content;government regulation of t

322、he Internet;and risks related to the computer systems that operate our e-commerce website and related support systems,including computer viruses,electronic data theft and similar disruptions.In addition,as we expand our e-commerce operations,we face the risk of increased losses from credit card frau

323、d.We do not carry insurance against the risk of credit card fraud,so under current credit card practices,we may be liable for fraudulent credit card transactions even though the associated financial institution has approved payment of the orders.If we are unable to deter or control credit card fraud

324、,or if credit card companies require more burdensome terms or refuse to accept credit card charges from us,our net income could be reduced.A breach of our e-commerce security measures could also reduce demand for our services.Our sales can significantly fluctuate based upon shopping seasons,which ma

325、y cause our operating results to fluctuate disproportionately on a quarterly basis.Because of a traditionally higher level of sales during the Christmas shopping season,our sales are typically higher in the third fiscal quarter than they are in the other fiscal quarters.We also incur significant add

326、itional costs and expenses during our third fiscal quarter due to increased staffing levels and higher purchase volumes.Accordingly,the results of a single fiscal quarter should not be relied on as an indication of our annual results or future performance.In addition,any factors that harm our third

327、fiscal quarter operating results could have a disproportionate effect on our results of operations for the entire fiscal year.We buy and stock merchandise based upon seasonal weather patterns and therefore unseasonable or extreme weather could negatively impact our sales,financial condition and resu

328、lts of operations.We buy and stock merchandise for sale based upon expected seasonal weather patterns.If we encounter unseasonable weather,such as warmer winters or cooler summers than would be considered typical,these weather variations could cause some of our merchandise to be inconsistent with wh

329、at consumers wish to purchase,causing our sales to decline.In addition,weather conditions affect the demand for our products,which in turn has an impact on prices.In past years,weather conditions,including unseasonably warm weather in winter months,and extreme weather conditions,including snow and i

330、ce storms,flood and wind damage,hurricanes,tornadoes,extreme rain and droughts,have affected our sales and results of operations both positively and negatively.Furthermore,extended unseasonable weather conditions in the western U.S.,particularly in California,will likely have a greater impact on our

331、 sales because of our store concentration in that region.Our strategy is to remain flexible and to react to unseasonable and extreme weather conditions by adjusting our merchandise assortments and redirecting inventories to stores affected by the weather conditions.Should such a strategy not be effe

332、ctive,unseasonable or extreme weather may have a material adverse effect on our financial condition and results of operations.If we fail to obtain and retain high-visibility sponsorship or endorsement arrangements with celebrities,or if the reputation of any of the celebrities that we partner with i

333、s impaired,our business may suffer.A principal component of our marketing program is to partner with well-known country music artists and other celebrities for sponsorship and endorsement arrangements.Although we have partnered with several well-known celebrities in this manner,some of these persons may not continue their endorsements,may not continue to succeed in their fields or may engage in ac