Item 1A. Risk Factors
ITEM
1A. RISK FACTORS
There
have been no material changes from the risk factors set forth in “Part I. Item 1A. Risk Factors” of our Annual Report on
Form 10-K for the fiscal year ended December 31, 2022, other than as noted below. Our business, operations and financial results are
subject to various risks and uncertainties that could materially adversely affect our business, results of operations, financial condition,
and the trading price of our common stock. You should carefully read and consider the risks and uncertainties included in the report
referenced above, together with all of the other information in such report and this Form 10-Q, including the section titled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related
notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones
we face, and the disclosure of any risk factor should not be interpreted to imply that the risk has not already materialized. The factors
discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed
in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and
oral statements.
Risks
Related to Acquisition of Belami
Global
economic conditions and the effect of economic pressures and other business factors on discretionary consumer spending and consumer preferences
may have a material adverse effect on our business, results of operations and financial condition.
Uncertainties
in global economic conditions that are beyond our control could materially adversely affect our business, results of operations, financial
condition and stock price. These adverse economic conditions include inflation, slower growth or recession, new or increased tariffs
and other changes to fiscal and monetary policy, higher interest rates, high unemployment, decreased consumer confidence in the economy,
armed hostilities, such as the ongoing military conflict between Russia and Ukraine, foreign currency exchange rate fluctuations, conditions
affecting the retail environment for products we sell, and other matters that influence consumer spending and preferences. In addition,
consumer confidence and spending can be materially adversely affected in response to financial market volatility, negative financial
news, conditions in the real estate and mortgage markets, including home equity loans and consumer credit, changes in net worth based
on market changes and uncertainty, energy shortages and cost increases, labor and healthcare costs, government actions and general uncertainty
regarding the overall future economic environment. Consumers may view a substantial portion of the products we offer as discretionary
items rather than necessities. As a result, our operating results are sensitive to changes in macroeconomic conditions that impact consumer
spending, including discretionary spending. Declines in consumer spending have resulted in, and could in the future result in, decreased
demand for our products and services, which has adversely affected our results of operations and may do so in the future.
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Our
marketing efforts to help grow our business may not be effective, and failure to effectively develop and expand our sales and marketing
capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our e-commerce channel.
If
the online market for home goods does not continue to gain acceptance, a significant portion of our business may suffer. Our success
will depend, in part, on our ability to attract consumers who have historically purchased home goods through traditional retailers. Furthermore,
we may have to incur significantly higher and more sustained advertising and promotional expenditures to attract additional online consumers
to our sites and convert them into purchasing customers online. Specific factors that could impact consumers’ willingness to purchase
home goods from us online, especially in markets where we do not have physical stores, include concerns about buying products without
a physical storefront, face-to-face interaction with sales personnel and the inability to physically handle, examine and compare products;
delivery time associated with online orders; actual or perceived lack of security of online transactions and concerns regarding the privacy
or protection of personal information; delayed shipments or shipments of incorrect or damaged products; inconvenience associated with
returning or exchanging items purchased online; usability, functionality and features of our sites; and our reputation and brand strength.
In addition, if we do not have a clear and relevant promotional calendar to engage our customers, especially in the current macroeconomic
environment, our customers may purchase fewer goods from us, or we may have to increase our promotional activities. If the shopping experience
we provide does not appeal to consumers or meet the expectations of existing customers, we may not acquire new customers at sustainable
rates, acquired customers may not become repeat customers and existing customers’ buying patterns and levels may decrease. In addition,
we may experience surges in online traffic and orders associated with promotional activities and seasonal trends, which could cause fluctuations
in our results of operations from quarter to quarter.