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Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also materially adversely affect our business, results of operations and financial condition.
−Removed: The COVID-19 pandemic could have a material adverse effect on our business and results of operations.
−Removed: The COVID-19 pandemic has caused and is likely to continue causing significant disruption to the global economy, to consumer spending and behavior, and to financial markets, and could have a material adverse effect on our business and financial results.
−Removed: The full extent of the impact of COVID-19 on our business and operating results cannot be predicted with certainty, and will depend largely on the duration and severity of the pandemic and other future events outside of our control.
−Removed: As a result of the COVID-19 pandemic, and in response to government orders and proactive decisions we have made to protect the health and safety of our employees, consumers and communities, at various points during the course of the pandemic we temporarily closed almost all of our retail stores globally and we furloughed all of our retail store employees in North America and many of our retail personnel elsewhere for an extended time.
+Added: Risks are listed in the categories where they primarily apply, but other categories may also apply.
+Added: Risk Relating to Our Business
+Added: The COVID-19 pandemic may continue to have a material adverse effect on our business and results of operations.
+Added: The COVID-19 pandemic has caused significant disruption to the global economy, consumer spending and behavior, tourism and to financial markets.
+Added: While the overall COVID-19 situation appears to be improving, we have not recovered to pre-COVID performance levels and our business and operating results may be negatively impacted if the virus worsens or mutates, if vaccination efforts are unsuccessful and/or if regions or countries take further actions to contain the virus (including additional extended lock-downs and travel restrictions), among others.
+Added: The full extent of the impact of COVID-19 on our business and operating results will depend largely on future events outside of our control, including the duration and severity of the pandemic and the success of vaccination efforts, new information concerning the virus or variants of the virus, and actions different states, regions or countries may take to contain the virus (including extended lock-downs and travel restrictions), among others.
+Added: As a result of the COVID-19 pandemic, and in response to government orders and proactive decisions we have made to protect the health and safety of our employees, consumers and communities, at various points during the course of the pandemic we temporarily closed almost all of our retail stores globally and furloughed all of our retail store employees in North America and many of our retail personnel elsewhere for an extended time.
We may face longer term store closure requirements and other operational restrictions with respect to some or all of our retail stores in the future, and government restrictions and health and safety measures (including social distancing protocols) may prevent us from opening or limit our ability to fully operate in the ordinary course, which could materially impact our financial results.
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Any or all of these measures could substantially reduce our revenue and have a material adverse effect on our profitability.
−Removed: In addition, these actions could lead to larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increases in bad debt expense, and reduced cash flows.
−Removed: Furthermore, our supply chain may also be significantly negatively affected if the factories that produce our product, the distribution centers that manage and ship our inventory, or the operations of our third-party logistics and other service providers are disrupted, closed or experience worker shortages, which may result in disruptions and delays in product shipments.
−Removed: In light of our retail store closures in response to government orders, mandates, guidelines and recommendations limiting business operations due to the COVID-19 pandemic, as well as decisions by many of the retail centers in which we operate to close shopping centers, we are taking certain actions with respect to our lease obligations, including discontinuing rent payments, negotiating with landlords for rent abatement or other rent relief and terminating certain leases, which may subject us to legal, reputational and financial risks.
+Added: In addition, these actions could lead to larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increases in credit losses and reduced cash flows.
+Added: Furthermore, our supply chain may also be significantly negatively affected if the factories that produce our product, the distribution centers that manage and ship our inventory, or the operations of our third-party logistics and other service providers
+Added: are disrupted, closed or experience worker shortages, which may result in disruptions and delays in product shipments and potentially higher costs.
+Added: In light of our retail store closures in response to government orders, mandates, guidelines and recommendations limiting business operations due to the COVID-19 pandemic, as well as decisions by many of the retail centers in which we operate to close shopping centers, we took certain actions and may continue to take certain actions with respect to our lease obligations, including discontinuing rent payments, negotiating with landlords for rent abatement or other rent relief and terminating certain leases, which may subject us to legal, reputational and financial risks.
We may also take further actions with respect to our lease obligations in the future, which may not be successful.
−Removed: In addition, we expect that traffic to our retail stores (and the retail stores of department stores and other third-party retailers that sell our products) as they reopen will be adversely affected by the COVID-19 pandemic as consumers may be concerned about becoming ill if they travel to physical retail locations.
+Added: In addition, we expect that traffic to our retail stores (and department stores and other third-party retailers that sell our products) as they reopen will be adversely affected by the COVID-19 pandemic.
We further expect that consumer spending will be negatively affected by macroeconomic conditions resulting from the COVID-19 pandemic, including a continued high unemployment rate and an economic recession, which may impact our physical retail stores, our e-commerce business and third-party wholesale accounts.
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Our insurance costs may also increase substantially in the future as a result of the COVID-19 pandemic.
−Removed: The long-term growth of our business depends on the successful execution of our strategic initiatives.
−Removed: As part of our long-term strategy, we intend to grow our market share and revenue through the following initiatives:
−Removed: • trendsetting and innovative product offerings;
−Removed: • increased brand engagement;
−Removed: • optimizing customer experience;
−Removed: • investing in technology;
−Removed: • expanding our global presence.
−Removed: We also intend to support the growth of Versace and Jimmy Choo sales through retail store openings and further developing each brand’s e-commerce and omni-channel presence, as well as expanding into the luxury accessories market.
−Removed: We cannot guarantee that we will be able to successfully execute on these strategic initiatives.
−Removed: If we are unable to execute on our strategic initiatives, including for reasons due to the challenges we face as a result of the COVID-19 pandemic, our business, results of operations and financial condition could be materially adversely affected.
−Removed: We have incurred a substantial amount of indebtedness, which could adversely affect our financial condition and restrict our ability to incur additional indebtedness or engage in additional transactions.
−Removed: As of March 28, 2020, our consolidated indebtedness was approximately $2.2 billion, net of debt issuance costs and discount amortization.
−Removed: Our total borrowings as of March 28, 2020 included $681 million outstanding under our 2018 Revolving Credit Facility, senior notes of $450 million and term loans of $1.0 billion.
−Removed: Our ability to make payments on and to refinance our debt obligations and to fund planned capital expenditures depends on our ability to generate cash from our operations.
−Removed: This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
−Removed: Until recently, we have been able to use our cash from operations to fund our debt service obligations and to utilize our Revolving Credit Facility to supplement our near-term liquidity needs.
−Removed: Our cash from operations have declined significantly largely due to retail store closures and reduced store traffic caused by the COVID-19 pandemic.
−Removed: Pursuant to the Second Amendment, an additional $230 million 364 day revolving credit facility was added under the 2018 Credit Facility and our lenders agreed to modify until March 31, 2021 the material adverse change representation required to be made in connection with revolving borrowings and the issuance or amendment of letters of credit to disregard certain COVID-19 pandemic-related impacts.
−Removed: Notwithstanding this additional facility and the modifications to our 2018 Credit Facility, our substantial level of indebtedness could have negative consequences to our business and we cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs, make necessary capital expenditures or pursue certain business opportunities.
−Removed: In addition, our ability to access the credit and capital markets in the future as a source of funding, and the borrowing costs associated with such financing, is dependent upon market conditions and our credit rating and outlook.
−Removed: In March 2020, Moody’s Investor Service downgraded their credit rating of us from Baa2 to Ba1, and in April 2020 Fitch Ratings downgraded their credit rating of us from BBB- to BB+.
−Removed: These downgrades, and any future reduction in our credit ratings, could result in reduced access to the credit and capital markets, more restrictive covenants in future financial documents and higher interest costs, and potentially increased lease or hedging costs.
−Removed: Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing and negatively impact our ability to enter into new financing arrangements in the future.
−Removed: We have suspended rent payments for our retail stores that have been closed because of the COVID-19 pandemic and as a result our landlords may attempt to hold us in breach of our lease obligations and take other actions, including terminating our leases and/or accelerating our future rent if we cannot reach acceptable settlements or otherwise prevail in litigation.
−Removed: We do not own any of our retail store facilities, but instead lease all of our stores under operating leases.
−Removed: Our leases generally have terms of up to 10 years, generally require a fixed annual base rent and most require the payment of additional percentage rent if store sales exceed a negotiated amount.
−Removed: Certain of our European stores also require initial investments in the form of key money to secure prime locations, which may be paid to landlords or existing lessees.
−Removed: Generally, our leases are “net” leases, which require us to pay all of the costs of insurance, taxes, maintenance and utilities.
−Removed: We generally cannot cancel these leases or withhold payments at our option, and payments under these operating leases account for a significant portion of our operating costs.
−Removed: For example, as of March 28, 2020, we were party to operating leases associated with our retail stores that we operate directly throughout the globe, as well as other global corporate facilities, requiring future minimum lease payments aggregating to $1.8 billion through Fiscal 2025 and approximately $566 million thereafter through Fiscal 2044.
−Removed: In light of our retail store closures in response to government orders, mandates, guidelines and recommendations limiting business operations due to the COVID-19 pandemic, as well as decisions by many of the retail centers in which we operate to close shopping centers, we temporarily closed all of our retail stores in North America and Europe.
−Removed: On April 1, 2020, we suspended rent payments under the leases for these stores.
−Removed: As a result of such suspension, landlords could allege that we are in default under the lease and attempt to terminate our lease and/or accelerate our future rents.
−Removed: Although we believe that strong legal grounds exist to support our claim that we are not obligated to pay rent during periods of closure as a result of the COVID-19 pandemic, there can be no assurance whether or not, and to what degree, such arguments will be successful, and any dispute under these leases may result in litigation with the landlord, which could be costly and have an uncertain outcome.
−Removed: In addition, as our retail stores reopen, we expect to require additional negotiations with our landlords to further defer or abate rent, to modify the terms of our leases (including rent and expiration date) and in certain instances to terminate a lease or permanently close a store.
−Removed: There can be no assurance that we will be able to successfully negotiate rent deferrals or abatements, lease modifications or lease terminations on favorable terms or at all.
−Removed: Our substantial operating lease obligations could have a material adverse effect on our business, results of operations and financial condition.
−Removed: We may be unable to meet financial covenants in our indebtedness agreements which could result in an event of default and restrictive covenants in such agreements may restrict our ability to pursue our business strategies.
−Removed: On March 20, 2020, we entered into the first amendment, and on June 25, 2020, we entered into the second amendment (the “Second Amendment”), to the third amended and restated senior unsecured credit facility, dated as of November 15, 2018 (as amended, the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent.
−Removed: The Company and a U.S., Canadian, Dutch and Swiss subsidiary of the Company are the borrowers under the 2018 Credit Facility.
−Removed: The borrowers and certain material subsidiaries of the Company provide guarantees of the 2018 Credit Facility.
−Removed: Pursuant to the Second Amendment, the obligations under the 2018 Credit Facility will be secured by substantially all of the assets of the Company and the US borrowers and guarantors and substantially all of the registered intellectual property of the Company, the borrower and the guarantors, subject to certain exceptions.
−Removed: Pursuant to the Second Amendment, the financial covenant in our 2018 Credit Facility requiring us to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021.
−Removed: When this financial covenant is reinstated, the applicable ratio will be calculated net of our unrestricted cash and cash equivalents to the extent in excess of $100 million and shall exclude up to $150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0.
−Removed: In addition, the Second Amendment requires us, during the period from June 25, 2020 until we deliver our financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amounts under the revolving facilities under the 2018 Credit Facility of not less than $300 million, increasing to $400 million on October 1, 2020 and $500 million on December 1, 2020.
−Removed: Our ability to satisfy the maximum net leverage ratio test when it is reinstated and the liquidity test may be affected by events beyond our control, including effects of COVID-19 on our business, and we may be unable to comply with these covenants.
−Removed: In addition, the 2018 Credit Facility and the Indenture governing our senior notes contain certain restrictive covenants that impose operating and financial restrictions on us, and the Second Amendment imposes incremental restrictions on certain of these covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on our ability to:
−Removed: • incur additional indebtedness and guarantee indebtedness;
−Removed: • pay dividends or make other distributions or repurchase or redeem capital stock;
−Removed: • make loans and investments, including acquisitions;
−Removed: • sell assets;
−Removed: • incur liens;
−Removed: • enter into transactions with affiliates;
−Removed: • consolidate, merge or sell all or substantially all of our assets
−Removed: which collectively may limit our ability to engage in acts that may be in our long-term best interest.
−Removed: A breach of the covenants or restrictions under the documents that govern our indebtedness could result in an event of default under the applicable indebtedness.
−Removed: Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
−Removed: In addition, an event of default under the credit agreement governing our 2018 Credit Facility would permit the lenders under our 2018 Credit Facility to terminate all commitments to extend further credit under that facility and foreclose on the collateral that secures the 2018 Credit Facility.
−Removed: In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
−Removed: As a result of these restrictions, we may be:
−Removed: • limited in how we conduct our business;
−Removed: • unable to raise additional debt or equity financing to operate during general economic or business downturns, including as a result of COVID-19;
−Removed: • unable to compete effectively or to take advantage of new business opportunities.
Our retail stores are heavily dependent on the ability and desire of consumers to travel and shop and a decline in consumer traffic could have a negative effect on our comparable store sales and store profitability resulting in impairment charges, which could have a material adverse effect on our business, results of operations and financial condition.
Reduced travel resulting from economic conditions, fuel shortages, increased fuel prices, travel restrictions, travel concerns and other circumstances, including adverse weather conditions, disease pandemics (including COVID-19), epidemics and other health-related concerns, war, terrorist attacks or the perceived threat of war or terrorist attacks could have a material adverse effect on us, particularly if such events impact our customers’ desire to travel to our retail stores.
−Removed: For example, social distancing measures and other restrictions imposed by governments as a result of the COVID-19 pandemic, which have had and are expected to continue to affect our customers’ ability and desire to travel to our stores, which in turn has had and will continue to have a material adverse impact on our store revenue.
+Added: For example, social distancing measures and other restrictions imposed by governments as a result of the COVID-19 pandemic, which have had and may continue to affect our customers’ ability and desire to travel to our stores, which in turn has had and may continue to have a material adverse impact on our store revenue.
In addition, other factors that could impact the success of our retail stores include:
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A decline in future comparable store sales and/or store profitability or failure to meet market expectations or the occurrence of impairment charges relating to our retail store fleet could have a material adverse effect on our business, results of operations and financial condition.
+Added: The long-term growth of our business depends on the successful execution of our strategic initiatives.
+Added: As part of our long-term strategy, we intend to grow our market share and revenue through the following initiatives:
+Added: • trendsetting and innovative product offerings;
+Added: • increased brand engagement;
+Added: • optimizing customer experience;
+Added: • investing in technology;
+Added: • expanding our global presence.
+Added: We also intend to support the growth of Versace and Jimmy Choo sales through retail store openings and further developing each brand’s e-commerce and omni-channel presence, as well as expanding into the luxury accessories market.
+Added: We cannot guarantee that we will be able to successfully execute on these strategic initiatives.
+Added: If we are unable to execute on our strategic initiatives, including for reasons due to the challenges we face as a result of the COVID-19 pandemic, our business, results of operations and financial condition could be materially adversely affected.
+Added: If we are unable to effectively execute our e-commerce business and provide a reliable digital experience for our customers, our reputation and operating results may be harmed.
+Added: While e-commerce still comprises a small portion of our net revenues, it has been our fastest growing business over the last several years, particularly in light of COVID-19 and retail store closures.
+Added: The success of our e-commerce business depends, in part, on third parties and factors over which we have limited control, including changing consumer preferences and buying trends relating to e-commerce usage, both domestically and abroad, and promotional or other advertising initiatives employed by our wholesale customers or other third parties on their e-commerce sites.
+Added: Any failure on our part, or on the part of our third-party digital partners, to provide attractive, reliable, secure and user-friendly e-commerce platforms could negatively impact our consumers’ shopping experience, resulting in reduced website traffic, diminished loyalty to our brands and lost sales.
+Added: In addition, if due to COVID-19 or otherwise there is a shift in consumer behavior such that customers utilize e-commerce over traditional brick-and-mortar stores, sales from our retail stores and wholesale channels of distribution may decline.
+Added: The success of our business also depends on our ability to continue to develop and maintain a reliable digital experience for our customers.
+Added: We strive to give our customers a seamless omni-channel experience both in stores and through digital technologies, such as computers, mobile phones, tablets, and other devices.
+Added: We also use social media to interact with our customers and enhance their shopping experience.
+Added: Our inability to develop and continuously improve our digital brand engagement could negatively affect our ability to compete with other brands, which could adversely impact our business, results of operations and financial condition.
+Added: In addition, we must keep up to date with competitive technology trends, including the use of new or improved technology, creative user interfaces and other e-commerce marketing tools such as paid search and mobile applications, among others, which may increase our costs and which may not succeed in increasing sales or attracting consumers.
+Added: For example, it is possible that consumers may not sign up for our loyalty program at anticipated rates if they do not find the features and benefits compelling, and that we may not realize the benefits that we anticipate from these programs.
+Added: Our failure to successfully respond to these risks and uncertainties might adversely affect the sales in our e-commerce business, as well as damage our reputation and brands.
+Added: Additionally, the success of our e-commerce business and the satisfaction of our consumers depend on their timely receipt of our products.
+Added: The efficient flow of our products requires that our company-operated and third-party operated distribution facilities have adequate capacity to support the current level of e-commerce operations and any anticipated increased levels that may follow from the growth of our e-commerce business.
+Added: If we encounter difficulties with our distribution facilities or in our relationships with the third parties who operate the facilities, or if any such facilities were to shut down or be limited in capacity for any reason, including as a result of fire, other natural disaster, labor disruption, or pandemic (including as a consequence of public health directives, quarantine policies or social distancing measures resulting from the COVID-19 pandemic), we could face shortages of inventory, and we could experience disruption or delay, or incur significantly higher costs and longer lead times for distributing our products to our consumers which could result in customer dissatisfaction.
+Added: Any of these issues could have an adverse effect on our business and harm our reputation.
A substantial portion of our revenue is derived from a small number of large wholesale customers, and the loss of or decline in business from any of these wholesale customers could substantially reduce our total revenue.
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Any or all of these measures could substantially reduce our revenue and have a material adverse effect on our profitability.
−Removed: In addition, these actions could lead to larger outstanding balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increase in excess inventory, increases in bad debt expense, and reduced cash flows.
−Removed: The retail industry has experienced a great deal of consolidation and other ownership changes over the past several years and we expect such changes will continue and that the risk of bankruptcy, restructurings or reorganizations by department stores and other retailers will increase as a result of COVID-19.
−Removed: The changes could also result in store closings by our wholesale customers, which would decrease the number of stores carrying our products, while the remaining stores may purchase a smaller amount of our products and/or may reduce the retail floor space designated for our brands.
+Added: In addition, these actions could lead to larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increase in excess inventory, increases in credit losses and reduced cash flows.
+Added: The retail industry has experienced a great deal of consolidation and other ownership changes over the past several years and a number of wholesale accounts were forced to file bankruptcy or undergo restructurings due to the impact of COVID-19 on their business.
+Added: We expect that the risk of consolidation, bankruptcy, restructurings or reorganizations by department stores and other retailers will continue to exist for the foreseeable future.
+Added: This could result in store closings by our wholesale customers, which would decrease the number of stores carrying our products, while the remaining stores may purchase a smaller amount of our products and/or may reduce the retail floor space designated for our brands.
In addition, such consolidation, bankruptcy or other changes with respect to our wholesale customers could decrease our opportunities in the market, increase our reliance on a smaller number of large wholesale customers and decrease our negotiating strength with our wholesale customers, which could have a material adverse effect on our business, results of operations and financial condition.
−Removed: Additionally, certain of our wholesale customers, particularly those located in the U.S., have become highly promotional and have aggressively marked down their merchandise and we expect that such markdowns may be exacerbated because of the impact of COVID-19.
+Added: Additionally, certain of our wholesale customers, particularly those located in the U.S., have become highly promotional and have aggressively marked down their merchandise.
+Added: We expect that such markdowns may continue to be exacerbated because of the impact of COVID-19.
Such promotional activity could negatively impact our business.
−Removed: The accessories, footwear and apparel industries are heavily influenced by general macroeconomic cycles that affect consumer spending and a prolonged period of depressed consumer spending could have a material adverse effect on our business, results of operations and financial condition.
−Removed: The accessories, footwear and apparel industries have historically been subject to cyclical variations, recessions in the general economy and uncertainties regarding future economic prospects that can affect consumer spending habits.
−Removed: Purchases of discretionary luxury items, such as our products, tend to decline during recessionary periods when disposable income is lower.
−Removed: The success of our operations depends on a number of factors impacting discretionary consumer spending, including the extent and duration of the ongoing impact of the COVID-19 pandemic, general economic conditions, consumer confidence, wages and unemployment, housing prices, consumer debt, interest rates, fuel and energy costs, taxation and political conditions.
−Removed: A worsening of the economy may negatively affect consumer and wholesale purchases of our products and could have a material adverse effect on our business, results of operations and financial condition.
−Removed: Our industry is subject to significant pricing pressure caused by many factors which may cause our profitability and gross margins in the future to be materially lower than our expectations.
−Removed: Our industry is subject to significant pricing pressure caused by many factors, including the impact of COVID-19 on the economy and consumer discretionary spending, intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, changes in consumer behavior, fashion trends, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, the success of marketing programs and weather and other environmental conditions.
−Removed: These factors may cause our profitability and gross margins in the future to be materially lower than in recent periods and our expectations, which could have a material adverse effect on our business, results of operations and financial condition.
−Removed: As a result of COVID-19, we may be faced with significant excess inventories, and in the future, if we misjudge the market for our products, we may have excess inventories for some products and missed opportunities for other products.
−Removed: We may be forced to rely on markdowns or promotional sales to dispose of excess and slow-moving inventory, which also may negatively impact our gross margin and profitability.
Acquisitions may not achieve intended benefits and may not be successfully integrated.
−Removed: We face additional risks associated with our strategy to grow our business through acquisitions of other brands and geographic licensees, such as our acquisitions of Versace in December 2018 and Jimmy Choo in November 2017.
Our acquisitions of Versace and Jimmy Choo or any other entity that we may acquire may not perform as well as initially expected, which could have a material adverse effect on our results of operations and financial condition.
In addition, we are required to test goodwill, brand and any other intangible assets acquired as a result of acquisitions for impairment.
−Removed: For Fiscal 2020, the carrying value of goodwill and brand intangible value for Jimmy Choo exceeded its respective related fair value, requiring us to record an impairment charge for the difference of $351 million.
−Removed: In addition, we may not be able to successfully integrate any licensee or any other business that we may acquire into our own business, or achieve any expected cost savings or synergies from such integration or we may determine to limit the integration of our brands.
−Removed: In addition to the overarching and continued challenges resulting from the COVID-19 pandemic, the potential difficulties that we may face that could cause the results of the acquisition of such previously licensed business, Versace, Jimmy Choo, or any other business that we may acquire to not be in line with our expectations include, among others:
+Added: For Fiscal 2021 and Fiscal 2020, the carrying value of goodwill and brand intangible value for Jimmy Choo exceeded its respective related fair value, requiring us to record impairment charges for the difference of $163 million and $351 million, respectively.
+Added: In addition, we may not be able to successfully integrate acquired businesses into our own business, or achieve any expected cost savings or synergies from such integration or we may determine to limit the integration of our brands.
+Added: In addition to the overarching and continued challenges resulting from the COVID-19 pandemic, the potential difficulties that we may face that could cause the results of our acquisitions to not be in line with our expectations include, among others:
• failure to implement our business plan for the combined business or to achieve anticipated revenue or profitability targets;
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• the impact on our internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002.
−Removed: Additionally, Jimmy Choo outsources its information technology, accounting and other back office activities to a third-party service provider pursuant to an agreement effective October 2, 2017.
+Added: Additionally, Jimmy Choo outsources its information technology, accounting and other back office activities to a third-party service provider.
There are risks of relying on a third-party provider to perform these services, which may include experiencing operational challenges and incurring increased expenses, which may result in a material adverse effect on our business, results of operations and financial condition.
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In addition, some of our competitors may be significantly larger and more diversified than us and may have significantly greater financial, technological, manufacturing, sales, marketing and distribution resources than we do.
−Removed: Their greater capabilities in these areas may enable them to better withstand periodic downturns in the accessories, footwear and apparel industries (including related to COVID-19), compete more effectively on the basis of price and production and more quickly develop new products.
+Added: Their capabilities in these areas may enable them to better withstand periodic downturns in the accessories, footwear and apparel industries (including those related to COVID-19), compete more effectively on the basis of price and production and more quickly develop new products.
The general availability of manufacturing contractors and agents also allows new entrants easy access to the markets in which we compete, which may increase the number of our competitors and adversely affect our competitive position and our business.
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If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our profitability may decline, which could have a material adverse effect on our business, results of operations and financial condition.
+Added: We may not be able to respond to changing fashion and retail trends in a timely manner, which could have a material adverse effect on our brands, business, results of operations and financial condition.
+Added: The accessories, footwear and apparel industries have historically been subject to rapidly changing fashion trends and consumer preferences.
+Added: We believe that our success is largely dependent on the images of our brands and ability to anticipate and respond promptly to changing consumer demands and fashion trends in the design, styling, production, merchandising and pricing of products.
+Added: If we do not correctly gauge consumer needs and fashion trends and respond appropriately, consumers may not purchase our products and our brand names and the images of our brands may be impaired.
+Added: Even if we react appropriately to changes in fashion trends and consumer preferences, consumers may consider our brands to be outdated or associate our brands with styles that are no longer popular or trend-setting.
+Added: Any of these outcomes could have a material adverse effect on our brands, business, results of operations and financial condition.
We face risks associated with operating globally and our strategy to continue to expand internationally.
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• political or civil unrest, including protests and other civil disruption;
−Removed: • unforeseen public health crises, such as pandemic and epidemic diseases, including the recent global outbreak of COVID-19;
+Added: • unforeseen public health crises, such as pandemic and epidemic diseases, including the COVID-19 pandemic and any variants thereof;
• economic instability and unsettled regional and global conflicts, which may negatively affect consumer spending by foreign tourists and local consumers in the various regions where we operate;
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• acts of terrorism, military actions or other conditions over which we have no control.
−Removed: In addition, on June 23, 2016, voters in the United Kingdom (“U.K.”) approved an advisory referendum to withdraw from the European Union ("EU"), commonly referred to as “Brexit”.
−Removed: On March 29, 2017, the U.K.
−Removed: triggered Article 50 of the Lisbon Treaty formally starting negotiations with the EU.
−Removed: formally left the EU on January 31, 2020.
−Removed: There is an agreement in principle to transitional provisions under which EU law would remain in force in the U.K.
−Removed: until the end of December 2020, but this remains subject to the successful conclusion of a final withdrawal agreement between the parties.
−Removed: Although the terms of the U.K.’s future relationship with the EU are still unknown, it is possible that there will be increased regulatory and legal complexities, including potentially divergent national laws and regulations between the U.K.
−Removed: Brexit may also cause disruption and create uncertainty surrounding our business, including affecting our relationship with our existing and future customers, suppliers and employees and resulting in increased cost by way of new or elevated customs duties or financial implications from operational challenges.
+Added: In addition, the United Kingdom (“U.K.”) formally left the European Union (“EU”) on January 31, 2020 (“Brexit”).
+Added: The consequences of Brexit could result in increased regulatory and legal complexities and cause disruption and create uncertainty surrounding our business, including affecting our relationship with our existing and future customers, suppliers and employees and resulting in increased costs from new or elevated customs duties or financial implications from operational challenges, trade or tax policies.
+Added: Brexit has also contributed to volatility and uncertainty in global stock markets and currency exchange rates, and could adversely impact investor confidence and consumer spending, including on discretionary items and retail products such as ours.
Finally, if our international expansion plans are unsuccessful, it could have a material adverse effect on our business, results of operations and financial condition.
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There are also some countries where we do not yet have significant operating experience, and in most of these countries we face established competitors with significantly more operating experience in those locations.
−Removed: Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in these countries and, as a result, sales of our product may not be successful, or the margins on those sales may not be in line with those we currently anticipate.
+Added: Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in these countries and, as a result, sales of our product may not be successful, or the gross margins on those sales may not be in line with those we currently anticipate.
There can be no assurance that any or all of these events will not have a material adverse effect on our business, results of operations and financial condition.
−Removed: Our business is subject to risks associated with importing products, and the imposition of additional duties and any changes to international trade agreements could have a material adverse effect on our business, results of operations and financial condition.
+Added: Our business is subject to risks associated with importing products, and the imposition of additional duties, tariffs or trade restrictions could have a material adverse effect on our business, results of operations and financial condition.
There are risks inherent to importing our products.
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We rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies relating to product importation.
−Removed: Additionally, we are subject to government regulations relating to importation activities.
−Removed: The imposition of taxes, duties and quotas and/or the withdrawal from or material modification to trade agreements could have a material adverse effect on our business, results of operations and financial condition.
−Removed: On May 10, 2019, the U.S.
−Removed: increased the sanction tariffs rate from 10% to 25% on $200 billion of imports of select product categories (Tranche 3), which includes handbags and travel goods from China, and effective September 1, 2019, a 10% tariff on an additional $300 billion of goods from China, including ready-to-wear, footwear and men’s products, went into effect.
+Added: For example, we have historically received benefits from duty-free imports on certain products from certain countries pursuant to the U.S.
+Added: Generalized System of Preferences ("GSP") program.
+Added: The GSP program expired on December 31, 2020.
+Added: If the GSP program is not renewed or otherwise made retroactive, we could experience significant additional duties and our gross margin could be negatively impacted.
+Added: Additionally, we are subject to government regulations relating to importation activities, including related to U.S.
+Added: Customs and Border Protection ("CBP") withhold release orders.
+Added: The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on our business, results of operations and financial condition.
If additional tariffs or trade restrictions are implemented by the U.S.
or other countries, the cost of our products could increase which could adversely affect our business.
−Removed: Privacy breaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business.
−Removed: We are dependent on information technology (“IT”) systems and networks for a significant portion of our direct-to-consumer sales, including our e-commerce sites and retail business credit card transaction authorization and processing.
−Removed: We are responsible for storing data relating to our customers and employees and also rely on third party vendors for the storage, processing and transmission of personal and Company information.
−Removed: Consumers, lawmakers and consumer advocates alike are increasingly concerned over the security of personal information transmitted over the Internet, consumer identity theft and privacy and the retail industry, in particular, has been the target of many recent cyber-attacks.
−Removed: In addition to taking the necessary precautions ourselves, we generally require that third-party service providers implement reasonable security measures to protect our employees’ and customers’ identity and privacy.
−Removed: We do not, however, control these third-party service providers and cannot guarantee the elimination of electronic or physical computer break-ins or security breaches in the future.
−Removed: Cyber security breaches, including physical or electronic break-ins, security breaches due to employee error or misconduct, attacks by “hackers,” phishing scams, malicious software programs such as viruses and malware, and other breaches outside of our control, could result in unauthorized access or damage to our IT systems and the IT systems of our third party service providers.
−Removed: Despite our efforts and the efforts of our third-party service providers to secure our and their IT systems, attacks on these systems do occur from time to time.
−Removed: As the techniques used to obtain unauthorized access to IT systems become more varied and sophisticated (including in connection with the COVID-19 pandemic, as cybercriminals are finding new ways to launch their attacks) and if the occurrence of such security breaches becomes more frequent, we and our third-party service providers may be unable to adequately anticipate these techniques and implement appropriate preventative measures.
−Removed: While we maintain cyber risk insurance to provide some coverage for certain risks associated with cyber security incidents, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cyber security incident.
−Removed: A significant breach of customer, employee or Company data could damage our reputation, our relationship with customers and our brands, and could result in lost sales, sizable fines, significant breach-notification and other costs and lawsuits, as well as adversely affect our results of operations.
−Removed: We may also incur additional costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and privacy threats, or to comply with current and new state, federal and international laws governing the unauthorized disclosure of confidential information which are continuously being enacted and proposed such as the General Data Protection Regulation in the EU and the California Consumer Privacy Act in California in the United States as well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees, engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information.
−Removed: A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.
−Removed: We rely extensively on our IT systems to track inventory, manage our supply chain, record and process transactions, manage customer communications, summarize results and manage our business.
−Removed: The failure of our IT systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in or failure to implement new systems, could adversely affect our business.
−Removed: We also operate a number of e-commerce websites throughout the world.
−Removed: Our IT systems and e-commerce websites may be subject to damage and/or interruption from power outages, computer, network and telecommunications failures, malicious software such as viruses and malware, attacks by “hackers”, security breaches, usage errors or misconduct by our employees and bad acts by our customers and website visitors which could materially adversely affect our business.
−Removed: In early Fiscal 2020, we embarked on a multi-year ERP implementation, but as a result of COVID-19 and our need to significantly reduce our capital expenditures in order to protect our liquidity and cash flows, we temporarily suspended our ERP project.
−Removed: Our inability to resume with our ERP implementation and to upgrade our IT systems could result in system failures, disruptions, damage or malfunctions, cause critical information upon which we rely to be delayed, defective, corrupted, inadequate, inaccessible or lost and otherwise cause delays or disruptions to our operations.
−Removed: If any of these events happen, we may have to make significant investments to fix or replace impacted systems.
−Removed: Our failure or inability to upgrade IT systems effectively also could cause us to be unable to compete effectively, could harm our reputation and credibility, and could have a material adverse effect on our business, results of operations and financial condition.
−Removed: We may not be able to respond to changing fashion and retail trends in a timely manner, which could have a material adverse effect on our brands, business, results of operations and financial condition.
−Removed: The accessories, footwear and apparel industries have historically been subject to rapidly changing fashion trends and consumer preferences.
−Removed: We believe that our success is largely dependent on the images of our brands and ability to anticipate and respond promptly to changing consumer demands and fashion trends in the design, styling, production, merchandising and pricing of products.
−Removed: If we do not correctly gauge consumer needs and fashion trends and respond appropriately, consumers may not purchase our products and our brand names and the images of our brands may be impaired.
−Removed: Even if we react appropriately to changes in fashion trends and consumer preferences, consumers may consider our brands to be outdated or associate our brands with styles that are no longer popular or trend-setting.
−Removed: Any of these outcomes could have a material adverse effect on our brands, our business, results of operations and financial condition.
−Removed: The success of our business also depends on our ability to continue to develop and maintain a reliable digital experience for our customers.
−Removed: We strive to give our customers a seamless omni-channel experience both in stores and through digital technologies, such as computers, mobile phones, tablets, and other devices.
−Removed: We also use social media to interact with our customers and enhance their shopping experience.
−Removed: Our inability to develop and continuously improve our digital brand engagement could negatively affect our ability to compete with other brands, which could adversely impact our business, results of operations and financial condition.
+Added: If we cannot successfully negotiate rent deferrals or abatements, lease modifications or lease terminations, our substantial operating lease obligations could have a material adverse effect on our business and our landlords may attempt to hold us in breach of our lease obligations and take other actions, including terminating our leases and/or accelerating our future rent.
+Added: We do not own any of our retail store facilities, but instead lease all of our stores under operating leases.
+Added: Our leases generally have terms of up to 10 years, generally require a fixed annual base rent and some require the payment of additional percentage rent if store sales exceed a negotiated amount.
+Added: Certain of our European stores also require initial investments in the form of key money to secure prime locations, which may be paid to landlords or existing lessees.
+Added: Generally, our leases are “net” leases, which require us to pay all of the costs of insurance, taxes, maintenance and utilities.
+Added: We generally cannot cancel these leases or withhold payments at our option, and payments under these operating leases account for a significant portion of our operating costs.
+Added: For example, as of March 27, 2021, we were party to operating leases associated with our retail stores that we operate directly throughout the globe, as well as other global corporate facilities, requiring future minimum lease payments aggregating to $1.8 billion through Fiscal 2026 and approximately $493 million thereafter through Fiscal 2044.
+Added: In light of our retail store closures in response to government orders, mandates, guidelines and recommendations limiting business operations due to the COVID-19 pandemic, as well as decisions by many of the retail centers in which we operate to close shopping centers, we temporarily closed all of our retail stores in North America and Europe.
+Added: On April 1, 2020, we suspended rent payments under the leases for these stores.
+Added: In many instances, we were able to negotiate with counterparties under our leases to defer or abate the applicable rent during the store closure period, to modify the terms (including rent) of our leases going forward when stores reopen, or in certain instances to terminate the leases and permanently close retail stores.
+Added: However, in instances where we were unable to negotiate with landlords, the landlords could allege that we are in default under
+Added: the lease and attempt to terminate our lease and/or accelerate our future rents.
+Added: Although we believe that strong legal grounds exist to support our claim that we are not obligated to pay rent during periods of closure as a result of the COVID-19 pandemic, there can be no assurance whether or not, and to what degree, such arguments will be successful, and any dispute under these leases may result in litigation with the landlord, which could be costly and have an uncertain outcome.
+Added: In addition, as certain of our retail stores in Europe, Canada and parts of Asia remain closed and as other locations reopen, we expect to require additional negotiations with our landlords to further defer or abate rent, to modify the terms of our leases (including rent and expiration date) and in certain instances to terminate a lease or permanently close a store.
+Added: There can be no assurance that we will be able to successfully negotiate rent deferrals or abatements, lease modifications or lease terminations on favorable terms or at all.
+Added: Our substantial operating lease obligations could have a material adverse effect on our business, results of operations and financial condition.
We are dependent on a limited number of distribution facilities.
−Removed: If one or more of our distribution facilities experiences operational difficulties or becomes inoperable, it could have a material adverse effect on our business, results of operations and financial condition.
+Added: If one or more of our distribution facilities experience operational difficulties or becomes inoperable, it could have a material adverse effect on our business, results of operations and financial condition.
We operate a limited number of distribution facilities.
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If we are unable to attract, develop, motivate and retain talented employees with the necessary skills and experience, or if changes to our organizational structure, operating results, or business model, including as a result of COVID-19, adversely affect morale, hiring and/or retention, we may not achieve our objectives and our results of operations could be adversely impacted.
−Removed: Our share price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial performance.
−Removed: Our business and long-range planning process is designed to maximize our long-term growth and profitability and not to achieve an earnings target in any particular fiscal quarter.
−Removed: We believe that this longer-term focus is in the best interests of our Company and our shareholders.
−Removed: At the same time, however, we recognize that it is helpful to provide investors with guidance as to our forecast of total revenue, earnings per share, comparable store sales and other financial metrics or projections.
−Removed: Historically, we have provided updates to our financial guidance when we report our results each fiscal quarter, but we do not have any responsibility to update any of our forward-looking statements at such times or otherwise.
−Removed: The dynamic nature of COVID-19 on our business makes it difficult for us to accurately project the potential impact on our business and therefore we may not provide quarterly or year-end guidance for the foreseeable future.
−Removed: In addition, any longer-term guidance that we provide is based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years.
−Removed: However, such long-range targets are more difficult to predict than our current quarter and fiscal year expectations.
−Removed: If, or when, we announce actual results that differ from those that have been predicted by us, outside investment analysts, or others, our share price could be adversely affected.
−Removed: Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own risk.
−Removed: We take no responsibility for any losses suffered as a result of such changes in our share price.
−Removed: We periodically return value to shareholders through our share repurchase program.
−Removed: Investors may have an expectation that we will repurchase all shares available under our share repurchase program.
−Removed: As a result of COVID-19, we suspended our share repurchase program.
−Removed: The market price of our securities could be adversely affected if our share repurchase activity differs from investors’ expectations or if our share repurchase program were to terminate.
Fluctuations in our tax obligations and changes in tax laws, treaties and regulations may have a material adverse impact on our future effective tax rates and results of operations.
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Any proposed or future changes in tax laws, treaties and regulations or interpretations where we operate could have a material adverse effect on our effective tax rates, results of operations and financial condition.
−Removed: On December 22, 2017, the U.S.
−Removed: government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).
−Removed: The Tax Act included significant changes to the U.S.
−Removed: corporate income tax system including, among other things, lowering the U.S.
−Removed: statutory federal tax rate to 21% and implementing a territorial tax system.
−Removed: The Tax Act also added many new provisions, including changes to bonus depreciation, limits on the deductions for executive compensation and interest expense, a tax on global intangible low-taxed income, the base erosion anti-abuse tax and a deduction for foreign derived intangible income.
−Removed: On March 26, 2015, the U.K.
−Removed: enacted new Diverted Profits Tax legislation (the “DPT”), which was effective on April 1, 2015.
−Removed: Under the DPT, profits of certain multinational enterprises (such as the Company) deemed to have been artificially diverted from the U.K.
−Removed: will be taxed at a rate of 25%.
−Removed: While the Company believes that all of its affiliated entities and the transactions among them have the required economic substance, there is no assurance that this legislation will not have a material effect on its results of operations and financial condition.
We and our subsidiaries are also engaged in a number of intercompany transactions.
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The BEPS recommendations covered a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties.
−Removed: Future tax reform resulting from this development may result in changes to long-standing tax principles, which could adversely affect our effective tax rate or result in higher cash tax liabilities.
+Added: Future tax reform resulting from this development may result in changes to long-standing tax principles, which could adversely affect our effective tax rate and/or result in higher cash tax liabilities.
Our business is exposed to foreign currency exchange rate fluctuations.
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However, we cannot fully anticipate all of our foreign currency exposures and cannot ensure that these hedges will fully offset the impact of foreign currency exchange rate fluctuations.
+Added: We also use fixed-to-fixed cross currency swap agreements to hedge our net investments in foreign operations against future volatility in the exchange rates between the U.S.
+Added: Dollars and these foreign currencies.
+Added: As a result, we are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations.
As a result of operating retail stores and concessions in various countries outside of the U.S., we are also exposed to market risk from fluctuations in foreign currency exchange rates, particularly the Euro, the British Pound, the Chinese Renminbi, the Japanese Yen, the Korean Won and the Canadian Dollar, among others.
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Although we take steps to carefully select our partners, such arrangements may not be successful.
−Removed: Our partners may fail to fulfill their obligations under their agreements or have interests that differ from or conflict with our own, such as the timing of new store openings, the pricing of our products and the offering of competitive products.
+Added: Our partners may fail to fulfill their obligations under these agreements or have interests that differ from or conflict with our own, such as the timing of new store openings, the pricing of our products and the offering of competitive products.
In addition, the risks applicable to the business of our partners may be different than the risks applicable to our business, including risks associated with each such partner’s ability to:
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Increases in the cost of raw materials could increase our production costs and cause our operating results and financial condition to suffer.
−Removed: Our business is subject to volatility in costs related to certain raw materials used in the manufacturing of our products.
+Added: Our business is subject to volatility of costs related to certain raw materials used in the manufacturing of our products.
The costs of raw materials used in our products are affected by, among other things, weather, consumer demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries and other factors that are generally unpredictable and beyond our control.
1 unchanged sentence
The ultimate effect of this change on our earnings cannot be quantified, as the effect of movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these prices could have a material adverse effect on our business, results of operations and financial condition.
−Removed: In addition, our costs may be impacted by sanction tariffs imposed on our products due to changes in trade terms and increased manufacturing labor costs which are also subject to degrees of volatility based on local and global economic conditions.
−Removed: Increases in commodity prices, tariffs and manufacturing labor costs could increase our production costs and negatively impact our revenues, results of operations and financial condition.
−Removed: We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods, which poses legal, regulatory, political and economic risks to our business operations.
+Added: In addition, our costs may be impacted by sanction tariffs and customs trade orders which could also impact sourcing and availability of raw materials used by our suppliers in the manufacturing of certain of our products.
+Added: Manufacturing labor costs are also subject to volatility based on local and global economic conditions.
+Added: Increases in commodity prices, tariffs, sanctions, customs trade orders and/or manufacturing labor costs could increase our production costs and negatively impact our revenues, results of operations and financial condition.
+Added: We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods and our business is subject to risks inherent in global sourcing activities, including disruptions or delays in manufacturing or shipments.
Our products are primarily produced by, and purchased or procured from, independent manufacturing contractors located mainly in Asia and Europe.
1 unchanged sentence
The failure to make timely deliveries may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us.
−Removed: In addition, any of the following factors could negatively affect our ability to produce or deliver our products and, as a result, could have a material adverse effect on our business, results of operations and financial condition:
−Removed: • disease pandemics, epidemics and health-related concerns, including related to COVID-19, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;
−Removed: • political or labor instability, labor shortages (stemming from labor disputes or otherwise), or increases in costs of labor or production in countries where manufacturing contractors and suppliers are located;
−Removed: • significant delays or disruptions in delivery of our products due to labor disputes or strikes at the location of the source of our goods and/or at ports of entry;
−Removed: • political or military conflict, which could cause a delay in the transportation of our products and raw materials and increase transportation costs;
−Removed: • heightened terrorism security concerns, which could subject imported or exported goods to additional, more frequent or more thorough inspections, leading to delays in deliveries or impoundment of goods for extended periods of time or could result in increased scrutiny by customs officials for counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures and damage to the reputation of our brands;
−Removed: • a significant decrease in availability or an increase in the cost of raw materials;
−Removed: • the migration and development of manufacturing contractors, which could affect where our products are or are planned to be produced;
−Removed: • imposition of regulations, quotas and safeguards relating to imports and our ability to adjust in a timely manner to changes in trade regulations, which, among other things, could limit our ability to produce products in cost-effective countries that have the labor and expertise needed;
−Removed: • increases in the costs of fuel, travel and transportation;
−Removed: • imposition of duties, taxes and other charges on imports, including if the United States follows through on its proposed additional China tariffs;
−Removed: • significant fluctuation of the value of the U.S.
−Removed: Dollar against foreign currencies;
−Removed: • restrictions on transfers of funds out of countries where our foreign licensees are located.
We do not have written agreements with any of our third-party manufacturing contractors.
As a result, any single manufacturing contractor could unilaterally terminate its relationship with us at any time.
−Removed: For example, in Fiscal 2020, Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for over ten years, accounted for the production of 20% of its finished products, based on dollar volume.
+Added: For example, in Fiscal 2021, Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for over ten years, accounted for the production of 18% of our finished products, based on dollar volume.
Our inability to promptly replace manufacturing contractors that terminate their relationships with us or cease to provide high quality products in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition, and impact the cost and availability of our goods.
−Removed: In addition, Michael Kors uses third-party agents to source its finished goods with numerous manufacturing contractors on its behalf.
+Added: Michael Kors uses third-party agents to source finished goods with numerous manufacturing contractors on its behalf.
Any single agent could unilaterally terminate its relationship with Michael Kors at any time.
1 unchanged sentence
Our inability to promptly replace agents that terminate their relationships with us or cease to provide high quality service in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition.
−Removed: If we fail to comply with labor laws or collective bargaining agreements, or if our manufacturing contractors fail to use acceptable, ethical business practices, our business and reputation could suffer.
+Added: In addition, as a company engaged in sourcing on a global scale, we are subject to the risks inherent in such activities, including, but not limited to:
+Added: • disease pandemics, epidemics and health-related concerns, including related to COVID-19 or variants thereof;
+Added: • political or labor instability, labor shortages (stemming from labor disputes or otherwise), or increases in costs of labor or production in countries where manufacturing contractors and suppliers are located;
+Added: • labor disputes or strikes at the location of the source of our goods and/or at ports of entry;
+Added: • disruptions or delays in shipments, including port delays and congestion, and/or capacity constraints on transportation of goods due to COVID-19;
+Added: • political or military conflict;
+Added: • heightened terrorism security concerns;
+Added: • a significant decrease in availability or an increase in the cost of raw materials;
+Added: • the migration and development of manufacturing contractors;
+Added: • product quality issues;
+Added: • imposition of regulations, quotas and safeguards relating to imports and our ability to adjust in a timely manner to changes in trade regulations;
+Added: • increases in the costs of fuel (including volatility in the price of oil), travel and transportation (including vessel and freight);
+Added: • imposition of duties, taxes and other charges on imports;
+Added: • significant fluctuation of the value of the U.S.
+Added: Dollar against foreign currencies;
+Added: • restrictions on transfers of funds out of countries where our foreign licensees are located;
+Added: • compliance by our independent manufacturers and suppliers with our Supplier Code of Conduct and other applicable compliance policies;
+Added: • compliance with U.S.
+Added: laws regarding the identification and reporting on the use of “conflict minerals” sourced from the Democratic Republic of the Congo in the Company’s products and the U.S.
+Added: Foreign Corrupt Practices Act, U.K.
+Added: Bribery Act and other global anti-corruption laws, as applicable.
+Added: If we fail to comply with labor laws or collective bargaining agreements, or if our independent manufacturing contractors fail to use acceptable, ethical business practices, our business and reputation could suffer.
We are subject to labor laws governing relationships with employees, including minimum wage requirements, overtime, working conditions and citizenship requirements.
−Removed: Versace and Jimmy Choo are also subject to collective bargaining agreements with respect to employees in certain European countries.
+Added: We are also subject to collective bargaining agreements with respect to employees in certain European countries.
Compliance with these laws and regulations, as well as collective bargaining agreements, may lead to increased costs and operational complexity and may increase our exposure to governmental investigations or litigation.
−Removed: We require our manufacturing contractors to operate in compliance with applicable laws, rules and regulations regarding working conditions, employment practices and environmental compliance.
−Removed: Additionally, we impose upon our business partners operating guidelines that require additional obligations in those three areas in order to promote ethical business practices, and our staff and third parties we retain for such purposes periodically visit and monitor the operations of our manufacturing contractors to determine compliance.
−Removed: However, we generally do not control our manufacturing contractors or their labor and other business practices.
−Removed: If one of our manufacturing contractors violates applicable labor or other laws, rules or regulations or implements labor or other business practices that are generally regarded as unethical, the shipment of finished products to us could be interrupted, orders could be cancelled, relationships could be terminated and our reputation could be damaged.
−Removed: Any of these events could have a material adverse effect on our business, results of operations and financial condition.
+Added: We require our independent manufacturing contractors to operate in compliance with applicable laws, rules and regulations regarding working conditions, employment practices and environmental compliance, as well as our Supplier Code of Conduct and other compliance policies under our Factory Social Compliance Program.
+Added: Our staff and third parties we retain for such purposes periodically visit and monitor the operations of our independent manufacturing contractors to determine compliance.
+Added: However, we generally do not control these manufacturing contractors or suppliers or their labor, environmental or other business practices.
+Added: The violation of labor, environmental or other laws by an independent manufacturer or supplier, or divergence of an independent manufacturer’s or supplier’s labor practices from those generally accepted as ethical or appropriate in the U.S.
+Added: or that violate our Supplier Code of Conduct, could interrupt or otherwise disrupt the shipment of our products, harm our trademarks or damage our reputation.
+Added: The occurrence of any of these events could materially adversely affect our business, financial condition and results of operations.
We may be unable to protect our trademarks, copyrights and other intellectual property rights, and others may allege that we infringe upon their intellectual property rights.
1 unchanged sentence
We are susceptible to others imitating our products and infringing our intellectual property rights in the Americas, EMEA, Asia and elsewhere in the world in both online and offline channels.
−Removed: Our brands enjoy significant worldwide consumer recognition and the generally higher pricing of our products creates additional incentive for counterfeiters to infringe on our brands.
+Added: Our brands enjoy significant worldwide consumer recognition and the generally higher pricing of our products creates additional incentive for counterfeiters
+Added: to infringe on our brands.
We work with customs authorities, law enforcement, legal representatives and brand specialists globally in an effort to prevent the sale of counterfeit products, but we cannot guarantee the extent to which our efforts to prevent counterfeiting of our brands and other intellectual property infringement will be successful.
6 unchanged sentences
Any litigation or dispute involving the scope or enforceability of our intellectual property rights or any allegation that we infringe upon the intellectual property rights of others could be costly and time-consuming and, if determined adversely to us, could result in harm to our competitive position.
−Removed: Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting, which could harm our business and cause a decline in the price of our ordinary shares.
−Removed: As a public company we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.
−Removed: If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal control over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could have an adverse effect on our business and cause a decline in the price of our ordinary shares.
+Added: We self-insure certain risks and may be impacted by unfavorable claims experience.
+Added: We use a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks including, employee health-care benefits, workers’ compensation, general liability, marine transport and inventory, property damage and business interruption.
+Added: Claims are difficult to predict and may be volatile.
+Added: Any adverse claims experience could have a material adverse effect on our results of operations, financial condition and cash flows.
We are subject to various proceedings, lawsuits, disputes, and claims in the ordinary course of business which could have an adverse impact on our business, financial condition, and results of operations.
1 unchanged sentence
These claims could include commercial, intellectual property, employment, customer and data privacy claims, as well as class action lawsuits.
−Removed: As a result of the COVID-19 pandemic, we may face an increase in claims against us including by landlords or other commercial counterparties, employees and customers.
Typically, these claims raise complex factual and legal issues and are subject to uncertainties.
4 unchanged sentences
Our retail stores, distribution centers and manufacturing facilities, including those operated by third-parties, are subject to risks relating to climate change and other environmental impacts from our operations.
−Removed: For example, the physical effects of climate change, such as severe weather events and/or significant changes in climate patterns as well as our carbon emissions and our business’ overall impact on the environment could subject us to reputational, market and/or regulatory risks.
+Added: For example, the physical effects of climate change, such as severe weather events, natural disasters and/or significant changes in climate patterns as well as our carbon emissions and our business’ overall impact on the environment could subject us to reputational, market and/or regulatory risks.
Climate change and other environmental concerns may cause social and economic disruptions in the places where we operate, including disruptions to our supply chain and to local infrastructure and transportation systems which could limit material availability and quality, impact our ability to ship and deliver product and prevent access to our physical locations.
These events could also adversely affect the economy and negatively impact consumer confidence and discretionary spending.
+Added: Concern over climate change may result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment.
+Added: There is also increased focus, including by investors, customers, and other stakeholders, on climate change and other sustainability matters.
In April 2020, we announced a global strategy to achieve significant, measurable goals across a range of important environmental and social sustainability issues, including, material sourcing, reducing greenhouse gas emissions and converting to renewal energy, responsible water use and waste reduction.
We may not be successful in attaining our goals, and even if we meet our commitments, there remains a significant risk that climate change and other environmental events could negatively impact our operations.
+Added: Increased scrutiny from investors and others regarding our corporate social responsibility initiatives, including environmental, social and other matters of significance relating to sustainability, could result in additional costs or risks and adversely impact our reputation.
+Added: Investor advocacy groups, certain institutional investors, investment funds, other market participants, shareholders and customers have increasingly focused on the environmental, social and governance ("ESG") or “sustainability” practices of companies.
+Added: These parties have placed increased importance on the implications of the social cost of their investments.
+Added: If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and customer and employee retention may be negatively impacted.
+Added: Any sustainability report that we publish or other sustainability disclosure we make may include our policies and practices on a variety of social and ethical matters, including corporate governance, environmental compliance, employee health and safety practices, human capital management, product quality, supply chain management, and workforce inclusion and diversity.
+Added: It is possible that stakeholders may not be satisfied with our ESG practices or the speed of adoption.
+Added: We could also incur additional costs and require additional resources to monitor, report and comply with various ESG practices.
+Added: Also, our failure, or perceived failure, to meet the standards included in any sustainability disclosure could negatively impact our reputation, employee retention and the willingness of our customers and suppliers to do business with us.
+Added: The accessories, footwear and apparel industries are heavily influenced by general macroeconomic cycles that affect consumer spending and a prolonged period of depressed consumer spending could have a material adverse effect on our business, results of operations and financial condition.
+Added: The accessories, footwear and apparel industries have historically been subject to cyclical variations, recessions in the general economy and uncertainties regarding future economic prospects that can affect consumer spending habits.
+Added: Purchases of discretionary luxury items, such as our products, tend to decline during recessionary periods when disposable income is lower.
+Added: The success of our operations depends on a number of factors impacting discretionary consumer spending, including the duration and severity of the pandemic and the success of vaccination efforts, new information concerning the virus or variants of the variance, and actions different states, regions or countries may take to contain the virus (including extended lock-downs and travel restrictions), among others, general economic conditions, consumer confidence, wages and unemployment, housing prices, consumer debt, interest rates, fuel and energy costs, taxation and political conditions.
+Added: A worsening of the economy may negatively affect consumer and wholesale purchases of our products and could have a material adverse effect on our business, results of operations and financial condition.
+Added: Our industry is subject to significant pricing pressure caused by many factors which may cause our profitability and gross margins in the future to be materially lower than our expectations.
+Added: Our industry is subject to significant pricing pressure caused by many factors, including the impact of COVID-19 on the economy and consumer discretionary spending, intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, changes in consumer behavior, fashion trends, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, the success of marketing programs and weather and other environmental conditions.
+Added: These factors may cause our profitability and gross margins in the future to be materially lower than in recent periods and our expectations, which could have a material adverse effect on our business, results of operations and financial condition.
+Added: We may be faced with significant excess inventories (due to the impact of COVID-19 or otherwise), and in the future, if we misjudge the market for our products, we may have excess inventories for some products and missed opportunities for other products.
+Added: We may be forced to rely on markdowns or promotional sales to dispose of excess and slow-moving inventory, which also may negatively impact our gross margin and profitability.
+Added: Risks Related to Privacy and Data Security
+Added: Privacy breaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business.
+Added: We are dependent on information technology (“IT”) systems and networks for a significant portion of our direct-to-consumer sales, including our e-commerce sites and retail business credit card transaction authorization and processing.
+Added: We are responsible for storing data relating to our customers and employees and also rely on third party vendors for the storage, processing and transmission of personal and Company information.
+Added: Consumers, lawmakers and consumer advocates alike are increasingly concerned over the security of personal information transmitted over the Internet, consumer identity theft and privacy and the retail industry, in particular, has been the target of many recent cyber-attacks.
+Added: In addition to taking the necessary precautions ourselves, we generally require that third-party service providers implement reasonable security measures
+Added: to protect our employees’ and customers’ identity and privacy.
+Added: We do not, however, control these third-party service providers and cannot guarantee the elimination of electronic or physical computer break-ins or security breaches in the future.
+Added: Cyber security breaches, including physical or electronic break-ins, security breaches due to employee error or misconduct, attacks by “hackers,” phishing scams, malicious software programs such as viruses and malware, and other breaches outside of our control, could result in unauthorized access or damage to our IT systems and the IT systems of our third party service providers.
+Added: Despite our efforts and the efforts of our third-party service providers to secure our and their IT systems, attacks on these systems do occur from time to time.
+Added: As the techniques used to obtain unauthorized access to IT systems become more varied and sophisticated (including in connection with the COVID-19 pandemic, as cybercriminals are finding new ways to launch their attacks) and if the occurrence of such security breaches becomes more frequent, we and our third-party service providers may be unable to adequately anticipate these techniques and implement appropriate preventative measures.
+Added: While we maintain cyber risk insurance to provide some coverage for certain risks associated with cyber security incidents, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cyber security incident.
+Added: A significant breach of customer, employee or Company data could damage our reputation, our relationship with customers and our brands, and could result in lost sales, sizable fines, significant breach-notification and other costs and lawsuits, as well as adversely affect our results of operations.
+Added: We may also incur additional costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and privacy threats, or to comply with current and new state, federal and international laws governing the unauthorized disclosure of confidential information which are continuously being enacted and proposed, such as the General Data Protection Regulation in the EU and the California Consumer Privacy Act in California in the United States, as well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees, engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information.
+Added: A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.
+Added: We rely extensively on our IT systems to track inventory, manage our supply chain, record and process transactions, manage customer communications, summarize results and manage our business.
+Added: The failure of our IT systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in or failure to implement new systems, could adversely affect our business.
+Added: We also operate a number of e-commerce websites throughout the world.
+Added: Our IT systems and e-commerce websites may be subject to damage and/or interruption from power outages, computer, network and telecommunications failures, malicious software, such as viruses and malware, attacks by “hackers”, security breaches, usage errors or misconduct by our employees and bad acts by our customers and website visitors which could materially adversely affect our business.
+Added: In early Fiscal 2020, we embarked on a multi-year ERP implementation, but as a result of COVID-19 and our need to significantly reduce our capital expenditures in order to protect our liquidity and cash flows, we temporarily suspended our ERP project.
+Added: Parts of the project have resumed as of the fourth quarter of Fiscal 2021.
+Added: Our inability to fully resume our ERP implementation and to upgrade our IT systems could result in system failures, disruptions, damage or malfunctions, cause critical information upon which we rely to be delayed, defective, corrupted, inadequate, inaccessible or lost and otherwise cause delays or disruptions to our operations.
+Added: If any of these events happen, we may have to make significant investments to fix or replace impacted systems.
+Added: Our failure or inability to upgrade IT systems effectively also could cause us to be unable to compete effectively, could harm our reputation and credibility, and could have a material adverse effect on our business, results of operations and financial condition.
+Added: Risks Related to Our Debt
+Added: We have incurred a substantial amount of indebtedness, which could adversely affect our financial condition and restrict our ability to incur additional indebtedness or engage in additional transactions.
+Added: As of March 27, 2021, our consolidated indebtedness was approximately $1.3 billion, net of debt issuance costs.
+Added: Our total borrowings as of March 27, 2021 primarily relate to senior notes of $450 million and term loans of $870 million.
+Added: Our ability to make payments on and to refinance our debt obligations and to fund planned capital expenditures depends on our ability to generate cash from our operations.
+Added: This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
+Added: Until recently, we have been able to use our cash from operations to fund our debt service obligations and to utilize our 2018 Revolving Credit Facility to supplement our near-term liquidity needs.
+Added: Our cash from operations have declined significantly, largely due to retail store closures and reduced store traffic caused by the COVID-19 pandemic.
+Added: Our substantial level of indebtedness could have negative consequences to our business and we cannot guarantee that our business will generate sufficient cash flow from our operations or that future
+Added: borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs, make necessary capital expenditures or pursue certain business opportunities.
+Added: Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing and negatively impact our ability to enter into new financing arrangements in the future.
+Added: The obligations under the second amendment, dated June 25, 2020 (the “Second Amendment”), to the third amended and restated credit facility, dated as of November 15, 2018 (the “2018 Credit Facility”) are secured by liens on substantially all of the assets of the Company and its U.S.
+Added: subsidiaries that are borrowers and guarantors, subject to certain exceptions, and substantially all of the registered intellectual property of the Company and its subsidiaries.
+Added: This requirement for collateral will be removed if the Company achieves an investment grade ratings requirement for two consecutive full fiscal quarters but there can be no assurance that the ratings requirement will be satisfied.
+Added: In addition, our ability to access the credit and capital markets in the future as a source of funding, and the borrowing costs associated with such financing, is dependent upon market conditions and our credit rating and outlook.
+Added: In March 2020, Moody’s Investor Service downgraded their credit rating of us from Baa2 to Ba1, and in April 2020 Fitch Ratings downgraded their credit rating of us from BBB- to BB+.
+Added: These downgrades, and any future reduction in our credit ratings, could result in reduced access to the credit and capital markets, more restrictive covenants in future financial documents and higher interest costs, and potentially increased lease or hedging costs.
+Added: We may be unable to meet financial covenants in our indebtedness agreements which could result in an event of default and restrictive covenants in such agreements may restrict our ability to pursue our business strategies.
+Added: Pursuant to the Second Amendment, the financial covenant in the Company’s 2018 Credit Facility requiring it to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021.
+Added: The Company terminated the waiver period effective May 26, 2021.
+Added: Effective as of that date, the applicable ratio will be calculated net of the Company’s unrestricted cash and cash equivalents in excess of $100 million and shall exclude up to $150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0.
+Added: The Second Amendment also requires the Company, during the period from June 25, 2020 until it delivers its financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amounts under the revolving facilities under the 2018 Credit Facility of not less than $500 million.
+Added: In addition, the 2018 Credit Facility and the Indenture governing our senior notes contain certain restrictive covenants that impose operating and financial restrictions on us, and the Second Amendment imposes incremental restrictions on certain of these covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on our ability to:
+Added: • incur additional indebtedness and guarantee indebtedness;
+Added: • pay dividends or make other distributions or repurchase or redeem capital stock;
+Added: • make loans and investments, including acquisitions;
+Added: • sell assets;
+Added: • incur liens;
+Added: • enter into transactions with affiliates;
+Added: • consolidate, merge or sell all or substantially all of our assets
+Added: which collectively may limit our ability to engage in acts that may be in our long-term best interest.
+Added: A breach of the covenants or restrictions under the documents that govern our indebtedness could result in an event of default under the applicable indebtedness.
+Added: Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
+Added: In addition, an event of default under the credit agreement governing our 2018 Credit Facility would permit the lenders under our 2018 Credit Facility to terminate all commitments to extend further credit under that facility and foreclose on the collateral that secures the 2018 Credit Facility.
+Added: In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
+Added: As a result of these restrictions, we may be:
+Added: • limited in how we conduct our business;
+Added: • unable to raise additional debt or equity financing to operate during general economic or business downturns, including as a result of COVID-19;
+Added: • unable to compete effectively or to take advantage of new business opportunities.
+Added: Risks Related to Our Ordinary Shares
+Added: Our share price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial performance.
+Added: Our business and long-range planning process is designed to maximize our long-term growth and profitability and not to achieve an earnings target in any particular fiscal quarter.
+Added: We believe that this longer-term focus is in the best interests of our Company and our shareholders.
+Added: At the same time, however, we recognize that it is helpful to provide investors with guidance as to our forecast of total revenue, earnings per share, comparable store sales and other financial metrics or projections.
+Added: While we generally expect to provide updates to our financial guidance when we report our results each fiscal quarter, we do not have any responsibility to update any of our forward-looking statements at such times or otherwise.
+Added: In addition, any longer-term guidance that we provide is based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years.
+Added: However, such long-range targets are more difficult to predict than our current quarter and fiscal year expectations.
+Added: If, or when, we announce actual results that differ from those that have been predicted by us, outside investment analysts, or others, our share price could be adversely affected.
+Added: Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own risk.
+Added: We take no responsibility for any losses suffered as a result of such changes in our share price.
+Added: We periodically return value to shareholders through our share repurchase program.
+Added: Investors may have an expectation that we will repurchase all shares available under our share repurchase program.
+Added: As a result of COVID-19, we suspended our share repurchase program.
+Added: The market price of our securities could be adversely affected if our share repurchase activity differs from investors’ expectations or if our share repurchase program were to terminate.
+Added: Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting, which could harm our business and cause a decline in the price of our ordinary shares.
+Added: As a public company, we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.
+Added: If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal control over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could have an adverse effect on our business and cause a decline in the price of our ordinary shares.
Provisions in our organizational documents may delay or prevent our acquisition by a third party.
Our Memorandum and Articles of Association (together, as amended from time to time, our “Memorandum and Articles”) contain several provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of our board of directors.
−Removed: These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their ordinary shares.
+Added: These provisions may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their ordinary shares.
These provisions include, among others:
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