Table of Contents to reimburse us for damages we may incur. Further  a significant breach of federal  state  provincial  local or international privacy laws could have a material adverse effect on our reputation  financial position  results of operations  and cash flows. We are heavily dependent upon our information technology systems to record and process transactions and manage and operate all aspects of our business ranging from product design and testing  production  forecasting  ordering  transportation  sales and distribution  invoicing and accounts receivable management  quick response replenishment  point of sale support to financial management reporting functions. In addition  we have multiple e-commerce websites. Given the nature of our business and the significant number of transactions in which we engage on an annual basis  it is essential that we maintain constant operation of our information technology systems and websites and that these systems and our websites operate effectively. We depend on our in-house information technology employees and third-parties including “cloud” service providers to maintain and periodically update and/or upgrade these systems and our websites to support the growth of our business. Despite our preventative efforts  our information technology systems and websites may  from time to time  be vulnerable to damage or interruption from events such as difficulties in replacing or integrating the systems of acquired businesses  computer viruses  security breaches and power outages. Cybersecurity attacks are becoming increasingly sophisticated and can include malicious software and ransomware  electronic security breaches and corruption of data. We are continually evaluating  improving and upgrading our information technology systems and websites in an effort to address these concerns. Our failure to identify and address potential problems or interruptions could result in loss of valuable business data  our customers' or employees' personal information  disruption of our operations and other adverse impacts to our business and require significant expenditures by us to remediate any such failure  problem or breach. Increased operating costs  including those resulting from potential increases in the minimum wage or wage increases reflecting competition in relevant labor markets  store occupancy costs  distribution center costs and other expense items  including healthcare costs  may reduce our operating margin  by making it more difficult to identify new store locations that we believe will meet our investment return requirements and slow our ability to open stores. In addition  other employment and healthcare law changes may increase the cost of provided retirement and healthcare benefits expenses. Increases in the Company’s overall employment costs could have a material adverse effect on the Company’s business  results of operations and financial and competitive position. Our performance depends largely on the efforts and abilities of members of our management team. Our executives have substantial experience and expertise in our business and have made significant contributions to our growth and success. The unexpected future loss of services of one or more key members of our management team could have an adverse effect on our business. In addition  future performance will depend upon our ability to attract  retain and motivate qualified employees  including store personnel and field management. If we are unable to do so  our ability to meet our operating goals may be compromised. Finally  our stores are decentralized  are managed through a network of geographically dispersed management personnel and historically experience a high degree of turnover. If we are for any reason unable to maintain appropriate controls on store operations due to turnover or other reasons  including the ability to control losses resulting from inventory and cash shrinkage  our sales and operating margins may be adversely affected. There can be no assurance that we will be able to attract and retain the personnel we need in the future. Each of our divisions uses a single distribution center to handle all or a significant amount of its merchandise. Most of our operations’ inventory is shipped directly from suppliers to our operations' distribution centers  where the inventory is then processed  sorted and shipped to our stores or to our wholesale customers. We depend on the orderly operation of this receiving and distribution process  which depends  in turn  on adherence to shipping schedules and effective management of the distribution centers. Although we believe that our receiving and distribution process is efficient and well positioned to support our current business and our expansion plans  we cannot offer assurance that we have anticipated all of the changing demands that our expanding operations will impose on our receiving and distribution system  or that events beyond our control  such as disruptions in operations due to fire or other catastrophic events  labor disagreements or shipping 14 The loss of  or disruption in  one of our distribution centers and other factors affecting the distribution of merchandise  including freight cost  could have a material adverse effect on our business and operations. If we lose key members of management or are unable to attract and retain the talent required for our business  our operating results could suffer. Increased operating costs  including those resulting from potential increases in the minimum wage  could have an adverse effect on our results. Operational  Supply Chain and Third Party Risks A disruption of information technology systems and websites could materially adversely affect other business.