Bob's Discount Furniture (BOBS) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We are subject to risks associated with our reliance on foreign manufacturing, suppliers and imports for our products
2. 02We face significant competition from national, regional and local retailers of home furnishings
3. 03If we fail to successfully anticipate or respond to changes in consumer preferences in a timely manner, our sales may decline
4. 04Our business, results of operations and financial condition may be adversely affected by global economic conditions and the effect of economic pressures, including inflation, and other business factors on discretionary consumer spending and consumer preferences
5. 05If we fail to successfully manage the challenges that our planned new store growth poses or encounter unexpected difficulties or higher costs during our expansion, our operating results and future growth opportunities could be adversely affected
6. 06Our business requires that we lease substantial amounts of space, and there can be no assurance that we will be able to continue to lease space on terms as favorable as the leases negotiated in the past
7. 07our corporate headquarters, certain incentives and subsidies offered by local and state governments. While we continually seek to identify the most advantageous lease opportunities, there is no guarantee that we will continue to be able to find low-cost sites or obtain favorable lease terms
8. 08Our failure to successfully anticipate merchandise returns might have a negative impact on our business
9. 09Any disruption in our distribution capabilities, supply chain or our related planning and control processes may adversely affect our business, financial condition and operating results
10. 10Significant fluctuations in the price, availability and quality of raw materials and components, or other fluctuations in sourcing or distribution costs, could adversely affect our profits
11. 11Our success depends substantially upon the continued retention of our key personnel, including our executive officers
12. 12Our success depends upon our ability to attract, hire, train, and retain highly qualified managers and staff
13. 13Our business operations depend on good relations with our employees
14. 14The effects of weather conditions, natural disasters or other unexpected events, including public health crises, may disrupt our operations and have a negative impact on our business
15. 15Inability to maintain and enhance our brand may materially adversely impact our business
16. 16If we are unable to effectively manage our eCommerce platform and digital marketing efforts, our reputation and operating results may be harmed
17. 17Our business exposes us to personal injury, product liability and warranty claims and related governmental investigations, which could result in negative publicity, harm our brand and adversely affect our business, financial condition, and operating results
18. 18Unfavorable allegations, government investigations and legal actions surrounding our products and us could harm our reputation, impair our ability to grow or sustain our business, and adversely affect our business, financial condition, and operating results
19. 19If we are unable to manage our inventory levels and products, including with respect to our omnichannel operations, there could be a material adverse effect on our business, financial condition, operating results and prospects
20. 20We are obligated to develop and maintain proper and effective disclosure controls and procedures and internal control over financial reporting. Our controls and procedures may not be effective, which may adversely affect investor confidence in us and, as a result, the value of our common stock
21. 21The accuracy of our audited consolidated financial statements and related disclosures could be affected if the judgments, assumptions or estimates used in our critical accounting policies and estimates are inaccurate
22. 22Fluctuations in foreign currency could have an adverse impact on our business
23. 23Changes in tax laws, trade policies and regulations or in our operations and newly enacted laws or regulations may impact our effective tax rate or may adversely affect our business, financial condition, and operating results
24. 24Our estimated addressable market is subject to inherent challenges and uncertainties. If we have overestimated the size of our addressable market, our future growth opportunities may be limited
25. 25Our current retail markets and other markets that we may enter in the future may not achieve the growth and profitability we anticipate
26. 26Our ability to attract customers to our stores depends on successfully locating our stores in suitable locations. Any impairment of a store location, including any decrease in customer traffic, could cause our sales to be lower than expected
27. 27Disruption in the financial markets could have a material adverse effect on customer demand and our ability to refund customer deposits

Risks Related to Data Privacy and Information Technology

1. 28Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business
2. 29A material disruption in our information systems, including our website, could adversely affect our business or operating results and lead to reduced net revenues and reputational damage
3. 30We rely on a variety of information technologies to operate our business, and our inability to successfully adopt new or improved technologies in a timely fashion may weaken our ability to effectively compete or otherwise adversely affect our business, financial condition, and operating results
4. 31We are subject to payments-related risks that could increase our operating costs, expose us to fraud, subject us to potential liability and potentially disrupt our business
5. 32We rely extensively on computer systems to process transactions, summarize results and manage our business. Disruptions in both our primary and back-up systems could adversely affect our business and operating results
6. 33Unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer systems or otherwise, could severely hurt our business

Risks Related to Our Intellectual Property

1. 34Our intellectual property rights are valuable, and any failure to protect them could reduce the value of our products and brand and harm our business
2. 35If we are unable to protect, acquire, use or maintain our marks and domain names for our sites, our business and operating results could be harmed
3. 36We may be involved in disputes from time to time relating to our intellectual property and the intellectual property of third parties
4. 37activities to avoid infringement or other violations of the intellectual property rights of others; (c) stop using the subject matter protected by the intellectual property held by others; or (d) pay significant compensatory and/or enhanced damages, attorneys’ fees and costs

Risks Related to Our Indebtedness

1. 38The ABL Credit Agreement contains covenants, which may restrict our current and future operations and could adversely affect our ability to execute our business needs
2. 39The amount of borrowings permitted under the Revolving Credit Facility may fluctuate significantly, which may adversely affect our business, results of operations and financial condition

General Risks

1. 40Federal, state or local laws and regulations, or our failure to comply with such laws and regulations, could increase our expenses, restrict our ability to conduct our business and expose us to legal risks
2. 41We are engaged in various legal actions, claims and proceedings arising in the ordinary course of business and, while we cannot predict the outcomes of such proceedings and other contingencies with certainty, this litigation and any potential future litigation could have an adverse impact on us
3. 42We are subject to risks related to corporate social responsibility
4. 43Our insurance coverage may be inadequate to cover all the liabilities we may incur

Risks Related to Ownership of our Common Stock

1. 44Our stock price may fluctuate or an active or liquid market in our common stock may not be sustainable, which could result in stockholders losing a significant part of their investment
2. 45We cannot predict the extent to which investor interest in us will sustain an active or liquid trading market on the New York Stock Exchange. If an active trading market is not sustained, you may have difficulty selling any of the common stock that you hold
3. 46We have incurred, and will incur, increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
4. 47If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our common stock adversely, our stock price and trading volume could decline
5. 48Because Bain Capital owns a significant percentage of our common stock, it may control all major corporate decisions and its interests may conflict with other stockholders' and our interests
6. 49Certain of our directors may have conflicts of interest because of their ownership of equity interests of, and their employment with, Bain Capital and its affiliates
7. 50Our second restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities, which could adversely impact our business
8. 51Our second restated certificate of incorporation contains exclusive forum provisions, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees
9. 52Delaware law and provisions in our second restated certificate of incorporation and second amended and restated bylaws could make a merger, tender offer or proxy contest more difficult, limit attempts by our stockholders to replace or remove our current management and depress the market price of our common stock