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Item 1A. Risk Factors

2026-03-30 compared with 2025-03-24 · 115 added, 60 removed, 222 unchanged (44% of the section changed)

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In addition to the other information in this Form 10-K and in our other public filings, investors should carefully consider the following risk factors.

These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.

The risks described below are not the only risks we face or may face, and investors should not interpret the disclosure of a risk to imply that the risk has not already materialized.

References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

Although the risks are organized by headings and each risk is discussed separately, many are interrelated.

The occurrence of any of the following risks, or the occurrence of additional risks and uncertainties not presently known to us or that we currently believe to be immaterial, could materially and adversely affect our business, financial condition or results of operations.

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Adverse global economic conditions that are caused by events or conditions beyond our control create uncertainties and have in the past impacted our business and may in the future materially adversely affect our business, results of operations, and financial condition.

These adverse economic conditions include inflation, economic downturns, recession or slower economic growth, new or increased tariffs and other barriers to trade, changes to fiscal and monetary policy, higher interest rates, high unemployment, decreased consumer confidence in the economy, public health threats, supply chain disruptions, international hostilities, foreign currency exchange rate fluctuations, conditions affecting the retail environment for products we sell, and other matters that influence consumer confidence.

Throughout 2024, our comparable sales declined as we experienced overall lower direct-to-consumer traffic.

These adverse economic conditions include slower economic growth, economic downturns or recessions, and may be caused by the impacts of inflation, uncertain tariff and trade policies, changes to fiscal and monetary policy, higher interest rates, high unemployment, volatile stock market indices, decreased consumer confidence in the economy, public health threats, labor and supply chain disruptions, geopolitical instability, international hostilities, political or social unrest, foreign currency exchange rate fluctuations, conditions affecting the retail environment for products we sell, and other matters that influence consumer confidence.

Consumer spending on discretionary items, including our products, generally declines during periods of economic uncertainty, when disposable income is reduced, or when there is a reduction in consumer confidence.

We believe the decrease in comparable sales is a result of ongoing consumer concern of negative and/or uncertain economic conditions, most notably the concern of economic volatility, fluctuations in interest rates, inflationary pressures, and changes in employment levels.

Additionally, our major retailer customers for our Brand Portfolio segment may experience a significant downturn in their businesses as a result of macroeconomic conditions and, in turn, these customers may reduce their purchases from us, which may have a material adverse effect on our business.

Competitive pricing pressure has been exacerbated by a more promotional retail environment as macroeconomic conditions impact discretionary consumer spending.

The continuation of these trends could have a material adverse effect on our business or operating results.

Moreover, we are unable to predict the severity of macroeconomic uncertainty, whether or when such circumstances may improve or worsen, or the full impact such circumstances could have on our business.

These factors ultimately could require us to enact further mitigating operating efficiency measures that may not be successful and could have a material adverse effect on our business, operations, and results of operations.

Adverse global economic conditions and disruptions to our business, along with a sustained decline in our stock price, may lead to triggering events that may indicate that the carrying value of certain assets, including inventories, accounts receivables, equity investments, long-lived assets, intangibles, and goodwill, may not be recoverable.

We believe these ongoing consumer concerns of negative and/or uncertain economic conditions, most notably the concern of economic volatility, inflationary pressures, uncertain tariff and trade policies, and changes in employment levels have had a negative impact on our operating results and liquidity during 2025 and we may continue to experience the impact of decreased consumer demand for our products and lower direct-to-consumer traffic.

We have enacted certain mitigating actions, including alignment of inventory with current demand levels, expense and capital expenditure reductions, and accelerating sourcing diversification efforts.

Although we have made progress in mitigating the impacts of certain macroeconomic conditions, our actions are not necessarily complete, and they should be viewed as part of the process in which we will continue our efforts to better align our cost structure with our operating results.

We are unable to predict the severity of macroeconomic uncertainty, whether or when such circumstances may improve or worsen, including from one of our quarterly reporting periods to the next, or the full impact such circumstances could have on our business.

Future impacts from macroeconomic conditions, including the impact of tariffs (as further described below) are unknown at this time and could have a material adverse effect on our business, results of operations, and liquidity.

Unfavorable developments may result in future write-downs or adjustments to inventories, receivables, and the valuation allowance on deferred tax assets, and may also negatively impact the fair value of our reporting units, indefinite-lived tradenames, and long-lived assets, which could result in us recording impairment charges for amounts below their carrying value.

Changes to U.S.

tariff policies could have a material adverse effect on our business, results of operations, and liquidity.

Following its January 2025 inauguration, the U.S.

administration has taken action to increase tariffs assessed on most products imported into the U.S.

Various modifications to the U.S.

tariffs have been announced, and further changes are expected to be made in the future, including in response to litigation, which has introduced heightened uncertainty regarding the future of global trade and the impact to our cost structure.

On February 20, 2026, the U.S.

Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (the "IEEPA").

Supreme Court did not address refunds or remedies but instead remanded the matter to the U.S.

Court of International Trade to address

In response, the U.S.

President issued an executive order rescinding the IEEPA tariffs and directing agencies to take measures to cease collection of the tariffs.

Further, following the decision, the U.S.

President imposed a new tariff surcharge of not less than 10% under Section 122 of the Trade Act of 1974 on all imports, subject to certain exceptions.

The tariffs under this statute took effect on February 24, 2026, and will remain in effect for 150 days (the maximum under the statute).

Tariffs have not been previously imposed under this statutory provision, and such tariffs may be increased.

On March 4, 2026, the U.S.

Court of International Trade ruled that companies that paid tariffs imposed under the IEEPA are due refunds.

There remains substantial uncertainty regarding any refund processes and further uncertainty regarding future trade policy actions, and any future tariffs or other trade policy actions could affect our cost structure and supply chain.

All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with the majority of our units sourced from Asia.

In addition to the merchandise sourced through our Brand Portfolio segment, our Retail segment also sources merchandise from third-party suppliers, with many of these suppliers importing a large portion of their merchandise from Asia.

We are closely monitoring this situation and evaluating the actions we have taken and additional actions we may take in the future, including cost mitigation measures and price adjustments.

For our Brand Portfolio segment, we have adjusted our sourcing diversification by optimizing where we source our products from in an effort to mitigate the risk, maximize flexibility, and decrease costs.

However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in Asia or elsewhere.

The ultimate impact of tariffs and other trade policies on our business will depend on several factors, including future measures implemented by the U.S.

government and the governments of other countries, the overall magnitude and duration of these measures, and our ability to mitigate effects, which could include higher import costs and our ability to obtain any refund.

Accordingly, our financial position or results of operations may be adversely influenced by political, economic, legal, compliance, social, and business conditions in the U.S.

and in other countries.

We may be unable to compete in the highly competitive footwear market, which could have a material adverse effect on our business.

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E-commerce networks have rapidly evolved and consumer receptiveness to shopping online has substantially increased.

Competition from e-commerce players has significantly increased due to their ability to provide improved user experiences, greater ease of buying goods, low or no shipping fees, faster shipping times, and more favorable return policies.

Businesses, including our suppliers, can easily launch e-commerce websites and mobile platforms at nominal costs by using commercially available software or partnering with various successful digital marketplace providers.

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unanticipated fashion trends;

our ability to provide timely access to popular brands at attractive prices;

our ability to provide timely access to popular brands and styles at attractive prices;

our success in distributing merchandise to our stores, online customers, and our wholesale retailer customers in an efficient manner;

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In addition, the continuing consumer shift to online and mobile shopping has increased customer expectations of lower shipping costs, improved shipping speeds, and optimized mobile platforms.

If we are unable to anticipate trends and fulfill the merchandise needs of our customers, we may experience decreases in our net sales and/or may be forced to increase markdowns in relation to slow-moving merchandise, either of which could have a material adverse effect on our business.

We rely on our strong relationships with suppliers to purchase products, including third-party manufacturers and national brand suppliers.

If we are unable to anticipate trends and fulfill the merchandise needs of our customers, we may experience decreases in our net sales and/or may

be forced to increase markdowns in relation to slow-moving merchandise, either of which could have a material adverse effect on our business.

We rely on our strong relationships with our suppliers.

If these relationships were to be impaired, we may be unable to obtain a sufficient assortment of merchandise at attractive prices or respond promptly to rapidly changing trends, either of which could have a material adverse effect on our business and financial performance.

The success of our business depends on our ability to obtain products from our suppliers, including third-party manufacturers and national brand suppliers, on a timely basis, on acceptable terms, and to our specifications.

If we fail to maintain strong relationships with these suppliers or if they fail to ensure the quality of merchandise that they supply to us, our ability to provide our customers with merchandise they want at favorable prices may be limited, which could have a material adverse effect on our business.

The success of our business depends on our ability to obtain products from our suppliers, including national brand suppliers and third-party manufacturers, on a timely basis, on acceptable terms, and to our specifications.

If we fail to maintain strong relationships with these suppliers or if they fail to ensure the quality of merchandise that they supply to us, our ability to provide our customers with merchandise they want at attractive prices may be limited, which could have a material adverse effect on our business.

In addition, any negative brand image, widespread product defects, financial distress, or negative publicity related to our suppliers could have a material adverse effect on our reputation and on our business.

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The loss of any of our major suppliers could disrupt our operations and adversely affect our business.

If these third-party manufacturers cease working with us, fail to meet our product safety, social compliance, or quality standards, or are unable to provide us with the materials and services that we need, at prices and on terms that are acceptable to us, then we could experience product delays and shortages.

If third-party manufacturers cease working with us, fail to meet our product safety, social compliance, or quality standards, or are unable to provide us with the materials and services that we need, at prices and on terms that are acceptable to us, then we could experience product delays and shortages.

Failure by us to deliver quality products to our customers on a timely basis and any associated damage to our reputation could have a material adverse impact on our business and results of operations.

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In addition, our inability to stock our sales channels with desired merchandise at attractive prices could result in lower net sales and decreased customer interest in our sales channels, which could have a material adverse effect on our business.

During 2024, three key national brand suppliers together supplied approximately 25% of our retail segments merchandise, with no individual supplier providing more than 10% of our retail merchandise.

During 2025, three key national brand suppliers together supplied approximately 24% of our Retail segment merchandise, with no individual supplier providing more than 10% of our retail merchandise.

The loss of, or a reduction in the amount and quality of merchandise supplied by, any of our high-volume suppliers could have an adverse effect on our business.

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Our operating results depend on the orderly operation of our receiving, distribution, and fulfillment processes, which in turn depend on suppliers' adherence to shipping schedules and our effective management of our facilities.

We may not anticipate all of the changing demands on our operations, and events beyond our control may occur, including disruptions in operations due to public health threats, catastrophic events, shortages in labor, or shipping problems, any of which may result in delays in the delivery of merchandise to our stores and customers.

We may not anticipate all of the changing demands on our operations, and events beyond our control may occur, including disruptions in operations due to public health threats, geopolitical instability, tariffs and other trade barriers and restrictions, catastrophic events, shortages in labor, or shipping problems, any of which may result in delays in the delivery of merchandise to our stores and customers.

We rely on the flow of goods through ports worldwide on a consistent basis from factories and suppliers.

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While we maintain business interruption and property insurance, if any of the points within our distribution systems were to shut down for any reason or if we were to incur higher costs and longer lead times in connection with a disruption, our insurance may not be sufficient to cover the impact to our business.

The loss or disruption of IT services could affect our operations and have a material adverse effect on our business.

We are subject to customer payment-related risks that could decrease our net sales, increase our operating costs, expose us to fraud or theft, subject us to potential liability, and potentially disrupt our business.

We accept customer payments using a variety of methods, including credit and debit cards, buy now pay later methods, PayPal, ApplePay, Venmo, and gift cards.

We are subject to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers.

The regulatory environment related to information security and privacy is increasingly rigorous, with new and constantly changing requirements applicable to our business, and compliance with those requirements could result in additional costs or accelerate these costs with additional legal and financial exposure for noncompliance.

For these payment methods, we pay interchange and other fees, which can increase over time and raise our operating costs.

We rely on third parties to provide customer payment processing services.

If these companies are unable to provide or stop providing these services to us, or if their systems are compromised, it could materially disrupt our business.

Additionally, a contractual dispute with our payment processing partners could adversely impact our business and our net sales.

Certain contracts may expire or be terminated, and we may not be able to enter into a new payment processor relationship that fully replaces the terminated services for a considerable period of time, which could negatively impact our business and operations.

For instance, in January 2026, we received a termination notice from an entity that provides the majority of our credit and debit card payment processing services for in-store and online transactions.

In February 2026, we entered into an amendment to the agreement with such entity and its affiliates pursuant to which, among other things, the termination notice was withdrawn, and the entity and its affiliates agreed to continue to provide us with the payment processing services for a transition period ending no later than May 31, 2026.

Further, in connection with entering into an amendment to our ABL Revolver in February 2026, we agreed to comply with certain timelines in connection with the transitioning of our payment processing service provider.

Any failure by us to successfully transition our services would result in an event of default under the amended ABL Revolver, which may not be waived.

While we are taking all necessary steps to expeditiously transition the services on or before the end of the transition period, we may be unable to do so in a cost-effective or timely manner, which could materially adversely affect our business and operations.

In addition, the Payment Card Industry ("PCI") is controlled by a limited number of vendors who have the ability to impose changes in the PCI’s fee structure and operational requirements on us without negotiation.

Such changes in fees and operational requirements may result in our failure to comply with industry data protection standards and protocols, causing us to incur significant unanticipated expenses.

The loss or disruption of IT services and other third-party services could affect our operations and have a material adverse effect on our business.

Our IT systems are an integral part of our strategies for efficiently operating our business, managing operations, and protecting against security risks related to our electronic processing and transmitting of confidential customer and associate data.

The requirements to keep our IT systems operating at peak performance may be higher than anticipated and could strain our capital resources, as well as impact our ability to manage any system upgrades, implement new systems, make management process changes for newly implemented systems, and prevent any information security breaches.

The requirements to keep our IT systems operating at peak performance may be higher than anticipated and could strain our capital resources, as well as impact our ability to manage any system upgrades and management process changes, implement new systems, and prevent any information security breaches.

In addition, any significant disruption of our data center could have a material adverse effect on our operations dependent on those systems, specifically, our store and e-commerce operations, our distribution centers, and our merchandising team.

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We face risks related to our electronic processing of sensitive and confidential personal and business data.

If such data is lost or disclosed in an unauthorized manner, or if we or our third-party vendors are subject to cyberattacks, data breaches, other security incidents, or disruption of IT systems or software, we could be exposed to liability or experience reputational harm, which could have a material adverse effect on our business.

If such data is lost or disclosed in an unauthorized manner, or if we or our third-party vendors are subject to cyberattacks, data breaches, other security incidents, or disruption of IT systems or software, our business and operations may be adversely affected and we could be exposed to liability or experience reputational harm.

Given the nature of our business, we, together with third parties acting on our behalf, receive, collect, process, use, and retain sensitive and confidential customer and associate data and proprietary business information.

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We also depend on a variety of information systems to effectively process customer orders and other data, for digital marketing activities, and for electronic communications with our associates, customers, prospective customers, and vendors.

Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to customer data.

Some of our third-party service providers, such as identity

verification and payment processing providers, also regularly have access to customer data.

Additionally, we maintain other confidential, proprietary, or otherwise sensitive information relating to our business and third parties.

The IT networks and systems operated by us or our vendors may be susceptible to damage, disruptions, data breaches, failures during the process of upgrading or replacing software, databases, or components, power outages, natural disasters, hardware failures, user errors or malfeasance, unauthorized access or attacks, including actions of foreign actors and insider attacks, phishing or denial-of-service attacks, the introduction of computer viruses and/or malicious or destructive code, ransomware or other malware attacks, and other real or perceived cyberattacks or catastrophic events, any of which may not be prevented by our efforts to secure our computer systems.

Any of these incidents could lead to interruptions or shutdowns of our platform, disruptions in our ability to process customer orders or to track, record, or analyze the sale of our products, loss or corruption of data, loss of funds, or unauthorized access to or acquisition of personal information or other sensitive information, such as our intellectual property.

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We utilize security tools and controls, which include reasonable efforts to ensure that our third-party vendors maintain sufficient security measures, including encryption and authentication technology, in an effort to reduce our cyber risk and protect personal and other sensitive information.

However, none of our or our vendors' security measures can provide absolute security.

Advances in computer capabilities, continually evolving and increasingly sophisticated tools and methods used by hackers and cyber terrorists, new discoveries in the field of cryptography, the potential use of artificial intelligence by cyber-attackers to develop malicious code and launch sophisticated phishing attempts, or other developments may result in our or our vendors' failure or inability to adequately protect personal or other sensitive information.

However, our ability to monitor our vendors’ cybersecurity is limited, and we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we share with them or prevent any disruption arising from a technology failure, cyberattack or other information or security breach.

Furthermore, none of our or our vendors' security measures can provide absolute security.

Advances in computer capabilities, continually evolving and increasingly sophisticated tools and methods used by hackers and cyber terrorists, new discoveries in the field of cryptography, the use of artificial intelligence by cyber-attackers to develop malicious code and launch sophisticated phishing or other social engineering attempts, or other developments may result in our or our vendors' failure or inability to adequately protect personal or other sensitive information.

In addition, vulnerabilities may be introduced from the use of artificial intelligence by us and our vendors.

Despite our or our vendors' security measures, we may be unable to

anticipate cyberattacks or implement adequate preventative measures and could suffer the impacts of a cyberattack, unauthorized access to personal information or other sensitive data, and any such data compromise or unauthorized access may not be discovered in a timely fashion and could persist for an extended period of time.

Despite our or our vendors' security measures, we may be unable to anticipate cyberattacks or implement adequate preventative measures and could suffer the impacts of a cyberattack, unauthorized access to personal information or other sensitive data, and any such data compromise or unauthorized access may not be discovered in a timely fashion and could persist for an extended period of time.

We rely on associates, contractors, and other third parties who may attempt to circumvent our security measures in order to obtain personal information or other sensitive data and may purposefully or inadvertently cause a breach involving such information.

Actual or anticipated attacks may cause us to incur increased costs, including costs to deploy additional personnel and protection technologies, train associates, pay higher insurance premiums, and engage third-party specialists for additional services.

An information security breach involving confidential and personal data could damage our reputation, adversely affect our customers' willingness to purchase from us, and adversely affect our vendors' willingness to supply or provide services to us.

An information security breach involving confidential and personal data could result in a loss of funds, damage our reputation, adversely affect our customers' willingness to purchase from us, and adversely affect our vendors' willingness to supply or provide services to us.

In addition, we may incur material liabilities and remediation costs as a result of an information security breach, including potential liability for stolen customer or associate data, costs relating to repairing system damage, or costs of providing credit monitoring or other benefits to customers or associates affected by the breach.

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We could also face potential claims, investigations, regulatory proceedings, liability, and litigation, and could bear other substantial costs in connection with remediating and otherwise responding to any data security breach, all of which may not be adequately covered by insurance, and which may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms, or at all.

Insurers may also deny us coverage as to any future claim.

Insurers may also deny us

coverage as to any future claim.

Further, cybersecurity and data protection laws and regulations continue to evolve, and are increasingly demanding, which adds compliance complexity and may increase our costs of compliance and expose us to litigation, monetary damages, regulatory enforcement actions or fines.

Any of these results could harm our growth prospects, financial condition, business, and reputation.

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Cybersecurity events, when detected by security tools or third parties, may not always be immediately understood or acted upon.

Our failure to protect the value of our banners, Owned Brands, or our reputation could have a material adverse effect on our brands.

We are exposed to risks related to the use of artificial intelligence tools or other new technologies by us and others.

Our use of artificial intelligence tools and other new technologies may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of such tools or technologies will enhance our business operations or result in a benefit to us.

Our competitors may outpace us and be more successful in their use of artificial intelligence tools and other new technologies, including by developing an enhanced shopping experience, improving customer engagement, or improving their operations with the assistance of such tools and technologies.

Our efforts to utilize these technological advancements may not be successful, may result in substantial integration and maintenance costs, and may expose us to additional risks.

There could be adverse impacts from inaccurate, deficient, biased or otherwise flawed algorithms, training or data sets.

Our use of such tools or technologies could also result in the loss of confidential information or intellectual property or an inability to claim or enforce intellectual property rights, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy, cybersecurity and the unauthorized use of Company information.

The jurisdictions in which we conduct business have and may adopt laws and regulations related to artificial intelligence that could cause us to incur greater compliance costs, limit our use of artificial intelligence tools, or subject us to legal liabilities.

Moreover, ethical concerns associated with artificial intelligence could lead to brand damage, competitive disadvantages, or legal repercussions.

Any problems with our implementation or use of artificial intelligence tools or other technological advancements could adversely impact our business or results of our operations.

Our failure to protect the value of our banners, exclusive and licensed brands, or our reputation could have a material adverse effect on our brands.

Our success is largely dependent on our ability to provide our customers with a merchandise assortment that they want and our ability to provide a consistent, high-quality customer experience.

We believe that maintaining and enhancing the reputation and recognition of our banners and our Owned Brands is critical to our ability to expand and retain our customer base.

We believe that maintaining and enhancing the reputation and recognition of our banners and our exclusive and licensed brands is critical to our ability to expand and retain our customer base.

Any negative publicity about us or the significant brands we offer may reduce demand for our merchandise.

Failure to comply with ethical, social, product, labor, health and safety, accounting, or environmental regulations and standards could also jeopardize our reputation and potentially lead to various adverse consumer actions, in addition to potential investigations or actions against us by governmental entities, fines, penalties, or other liabilities.

In addition, negative claims or publicity, including on social media, regarding celebrities with whom we have license and endorsement arrangements could adversely affect our reputation and sales, regardless of whether such claims are accurate.

In addition, negative claims or publicity, including on social media, regarding celebrities and influencers with whom we have arrangements could adversely affect our reputation and sales, regardless of whether such claims are accurate.

Consumer actions could include boycotts and negative publicity through social or digital media.

Negative public perception about us or the products we carry, whether justified or not, could impair our reputation, subject us to litigation, damage our brands, or have a material adverse effect on our business.

We hold exclusive licensing rights that allow us to design, source, and sell footwear for certain of our key Owned Brands, including Vince Camuto, Jessica Simpson, and Lucky Brand.

We hold exclusive licensing rights that allow us to design, source, and sell footwear for certain of our key licensed brands, including Vince Camuto, Jessica Simpson, and Lucky Brand.

We rely on our ability to retain and maintain good relationships with the licensors and their ability to maintain strong, well-recognized brands and trademarks.

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Even our longer-term or renewable licenses are typically dependent upon our ability to market and sell the licensed products at specified levels, and our failure to meet such levels may result in the termination or non-renewal of such licenses.

Furthermore, many of our license agreements require minimum royalty payments, and if we are unable to generate sufficient sales and profitability to cover these minimum royalty requirements, we may be required to make additional payments to the licensors, which could have a material adverse effect on our business and results of operations.

The demand for the brands we sell may also depend on how we are viewed relative to corporate social responsibility ("CSR") and environmental, social, and governance ("ESG") positions, which may not align with the expectations of our customers, investors, and other stakeholders.

Risks associated with these initiatives include any increased public focus, including by governmental and nongovernmental organizations, new laws and regulations, increased costs associated with sustainability efforts and/or compliance with laws and regulations, as well as increased pressure to expand our CSR and ESG disclosures in these areas, make commitments, set targets, or establish additional goals and take actions to achieve such targets and goals.

At the same time, there also exists sentiment against such initiatives among certain stakeholders and government institutions, and we may face scrutiny, customer boycotts, reputational risk, lawsuits, or market access restrictions from these parties regarding our CSR or ESG positions.

Furthermore, many of our license agreements require minimum royalty payments regardless of sales volumes, which could have a material adverse effect on our business and results of operations.

The demand for the brands we sell may also depend on how we are viewed relative to corporate social responsibility ("CSR"), including environmental, social, and governance positions, which may not align with the expectations of our customers, investors, and other stakeholders.

efforts and/or compliance with laws and regulations, as well as increased pressure to expand our CSR disclosures, make commitments, set targets, or establish additional goals and take actions to achieve such targets and goals.

Inconsistency of legislation and regulations among jurisdictions, including anti-environmental, social and governance policies or legislation, and any additional regulations may also affect the costs of compliance with such laws and regulations.

All of the foregoing could expose us to market, operational, and execution costs or risks.

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Our reputation could be damaged if we do not, or are perceived to not, act responsibly with respect to these matters, which could also have a material adverse effect on our business, results of operations, financial position, and cash flows.

We are dependent on our customer retail reward programs and marketing to drive traffic, sales, and loyalty, and any decrease in membership or purchases from members could have a material adverse effect on our business.

We are dependent on our retail customer reward programs and marketing to drive traffic, sales, and loyalty, and any decrease in membership or purchases from members could have a material adverse effect on our business.

Customer traffic is influenced by our marketing methods and our reward programs.

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We employ a variety of marketing methods, including email, direct mail, and social media, to communicate product offerings and various promotions and discounts to all of our customers, as well as exclusive offers to our rewards members.

As of February 1, 2025, we had 30.8 million members enrolled in our VIP reward programs who have made at least one purchase over the last two years.

In 2024, shoppers in the reward programs generated approximately 86% of the combined U.S.

Retail and Canada Retail segments' net sales.

As of January 31, 2026, we had 30.0 million members enrolled in our VIP reward programs who have made at least one purchase over the last two years.

In 2025, shoppers in the reward programs generated approximately 89% of the Retail segment's net sales.

If our rewards members decrease their purchase frequency or do not continue to shop with us, we fail to add new members, the number of members decreases, or our marketing is not effective in driving customer traffic, such event could have a material adverse effect on our business.

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From time to time, we may acquire or invest in businesses, or we may license brands that we believe could complement our business and offer growth opportunities.

For example, in the first quarter of 2024, we acquired Rubino.

For example, in 2024, we acquired Rubino.

The expected contribution to our business as a result of this and other acquisitions or investments may not materialize.

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Our integration efforts may not be successful, or we may not realize the anticipated benefits after we complete our integration efforts.

In addition, we may from time to time evaluate and pursue other strategic initiatives, investments, or acquisitions.

These strategic initiatives, investments, or acquisitions could involve various inherent risks, and the benefits sought may not be realized, or these strategic initiatives, acquisitions, or investments may not create value or may harm our brand and adversely affect our business, financial condition, and results of operations.

In addition, we may from time to time evaluate and pursue other strategic initiatives, investments, acquisitions, or divestitures, including business restructurings and other strategic activities.

These strategic initiatives, investments, acquisitions, or divestitures could involve various inherent risks, and the benefits sought may not be realized, or these strategic initiatives, acquisitions, investments, or divestitures may not create value or may harm our brand and adversely affect our business, financial condition, and results of operations.

Our failure to retain our existing senior management team or continue to attract qualified new personnel could have a material adverse effect on our business.

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Competition for these types of personnel is intense, and we may not be successful in attracting and retaining the personnel required to grow and operate our business.

Our failure to retain existing and secure new store locations under acceptable lease terms for our retail segments could have a material adverse effect on our business.

The success of our retail segments depends, in part, on our ability to secure long-term leases in desirable locations at acceptable terms for our stores and to secure renewals of such leases.

Our failure to retain existing and secure new store locations under acceptable lease terms could have a material adverse effect on our business.

The success of our Retail segment depends, in part, on our ability to secure long-term leases in desirable locations at acceptable terms for our stores and to secure renewals of such leases.

No assurance can be given that we will be able to successfully negotiate lease renewals for existing stores or obtain acceptable terms for new stores in desirable locations.

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The ABL Revolver requires us to maintain a fixed charge coverage ratio of not less than 1:1 when availability is less than the greater of $47.3 million or 10.0% of the maximum borrowing amount.

Our ABL Revolver and Term Loan also contain customary covenants restricting our activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends, repurchase stock, and make certain other changes.

At any time that liquidity is less than $100.0 million, the Term Loan requires the consolidated net leverage ratio to be no greater than 2.50 to 1.00, calculated on a trailing twelve-month basis and measured on the last day of each fiscal month.

Our ABL Revolver and Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes.

There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability.

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Our international operations and reliance on foreign-sourced merchandise exposes us to risks associated with international matters.

We have key international operations in various locations, including Canada and China, and we face risks inherent in sourcing our merchandise from third-party manufacturers and national brand suppliers with foreign operations.

We face risks inherent in sourcing our merchandise from national brand suppliers and third-party manufacturers with foreign operations.

Our operations may be adversely affected by international political, economic, and social instability;

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and currency laws and regulations.

Risks may also include, among others, public health threats, which has in the past materially adversely impacted our business;

Risks may also include, among others, public health threats;

inclement weather and natural disasters;

international hostilities, including the ongoing war in Ukraine and conflicts in the Middle East, militant attacks on cargo vessels in the Red Sea, which ultimately could adversely impact supplier deliveries or freight costs, or terrorism;

international hostilities, including the wars in Ukraine and Iran, or terrorism;

increases in shipping costs;

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and greater difficulty in enforcing intellectual property rights.

Additionally, fluctuations in foreign currency exchange rates may negatively impact our financial results.

With a substantial portion of our merchandise being imported from foreign countries, any of these events could result in our failure to obtain merchandise in a timely manner, which ultimately could have a material adverse effect on our business, financial condition, or results of operations.

With a substantial portion of our merchandise being sourced from

foreign countries, any of these events could result in our failure to obtain merchandise in a timely manner, which ultimately could have a material adverse effect on our business, financial condition, or results of operations.

We require our business partners to operate in compliance with applicable laws and regulations and our internal requirements.

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Our business is subject to a variety of federal, state, local, and foreign laws and regulations, orders, rules, codes, regulatory guidance, and certain industry standards regarding privacy, data protection, consumer protection, information security, and the processing of personal information and other data.

For example, the California Consumer Privacy Act of 2018 ("CCPA") imposes certain restrictions and disclosure obligations on businesses that collect personal information about California residents and provides for a private right of action, as well as penalties for

noncompliance.

The CCPA provides for civil penalties for violations and creates a private right of action for certain data breaches that is expected to increase data breach litigation.

In addition, the California Privacy Rights Act amended and expanded the CCPA and placed additional restrictions on the "sharing" of personal information for purposes of cross-context behavioral advertising.

We are subject to additional state privacy regulations, including the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Connecticut Data Privacy Act, and the Utah Consumer Privacy Act, which regulate the processing of "personal data" regarding their respective residents and which grant residents certain rights with respect to their personal data.

State laws are changing rapidly, and new legislation proposed or enacted in a number of other states imposes, or has the potential to impose, additional obligations on companies that process confidential, sensitive and personal information, and will continue to shape the data privacy environment nationally.

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Locations where we operate and that we consider to be material to our business, as set forth in Item 2.

Properties of this Form 10-K, as well as locations operated by our vendors, may be subject to natural disasters, other extreme weather conditions, and negative climate change patterns, which may be exacerbated by climate change.

Properties of this Form 10-K, as well as locations operated by our vendors, may be subject to natural disasters, other extreme weather conditions, and negative climate patterns, which may be exacerbated by climate change.

Weather-related risks, including resource scarcity, rationing, or unexpected costs from increases in fuel or raw material prices, could disrupt our operations.

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Because our business is heavily weighted towards dress and seasonal products, unseasonably warm temperatures during our fall selling season or unseasonably cool weather during our spring selling season may diminish demand for our seasonal merchandise.

We experienced this during 2024 with respect to unseasonably warm weather during our fall selling season, which adversely impacted our results of operations.

In addition, heavy snowfall, hurricanes, or other severe weather events where our retail stores and the retail stores of our wholesale customers are located may decrease customer traffic in those stores and reduce our sales and profitability.

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Schottenstein, the Executive Chairman of our Board, and members of his family (the "Schottenstein Affiliates") directly control or substantially influence the outcome of matters submitted for shareholder votes, and their interests may differ from other shareholders.

As of February 1, 2025, the Schottenstein Affiliates beneficially owned approximately 31% of the Company's outstanding common shares, representing 67% of the combined voting power, consisting of, in the aggregate, 7.2 million Class A common shares (which are entitled to one vote per share) and 7.7 million Class B common shares (which are entitled to eight votes per share).

As of January 31, 2026, the Schottenstein Affiliates beneficially owned approximately 30% of the Company's outstanding common shares, representing 66% of the combined voting power, consisting of, in the aggregate, 7.4 million Class A common shares (which are entitled to one vote per share) and 7.7 million Class B common shares (which are entitled to eight votes per share).

The Schottenstein Affiliates directly control or substantially influence the outcome of matters submitted to our shareholders for approval, including the election of directors, approval of mergers or other business combinations, and approval of acquisitions or dispositions of assets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors