INDUSTRY RISKS OPERATIONAL RISKS

If we are unable to generate interest in and demand for our interactive retail experience and products, Including being able to identify and respond to consumer preferences in a timely manner, our sales, Financial condition and profitability could be adversely affected. If we are unable to generate interest in and demand for our interactive retail experience and products, including being able to identify and respond to consumer preferences in a timely manner, our sales, financial condition and profitability could be adversely affected. We are subject to risks associated with technology and digital operations. If we are unable to renew, renegotiate or replace our store leases or enter into leases for new stores on favorable terms, or if we violate any of the terms of our current leases, our revenue and profitability could be harmed. Our company-owned distribution center that services the majority of our stores in North America and our third-party distribution center providers used in the western U.S. and Europe may be required to close and operations may experience disruptions or may operate inefficiently. We may not be able to evolve our store locations over time to align with market trends, successfully diversify our store models and formats in accordance with our strategic goals or otherwise effectively manage our overall portfolio of stores which could adversely affect our ability to grow and could significantly harm our profitability.

The COVID pandemic has had and is expected to continue to have an adverse effect on our business and results of operations. We depend upon the shopping malls and tourist locations in which our stores are located to attract guests. Continued or further declines in retail customer traffic could adversely affect our financial performance and profitability. A decline in general global economic conditions could lead to disproportionately reduced discretionary consumer spending and a corresponding reduction in demand for our products and have an adverse effect on our liquidity and profitability. Consumer interests can change rapidly, and our success depends on the ongoing effectiveness of our marketing and on-line initiatives to build consumer affinity for our brand and drive consumer demand for our products and services. Our profitability could be adversely affected by fluctuations in petroleum products prices. Our business may be adversely impacted at any time by a variety of significant competitive threats.