GPS Gap, Inc.

Risks

• The separation may not achieve some or all of the anticipated benefits.
• We must successfully gauge apparel trends and changing consumer preferences to succeed.
• Our business is highly competitive.
• We must maintain our reputation and brand image.
• The failure to attract and retain key personnel, or effectively manage succession, could have an adverse impact on our results of operations.
• Our investments in customer, digital, and omni-channel shopping initiatives may not deliver the results we anticipate.
• If we are unable to manage our inventory effectively, our gross margins could be adversely affected.
• We are subject to data and security risks, which could have an adverse effect on our results of operations and consumer confidence in our security measures.
• Failures of, or updates or changes to, our IT systems may disrupt operations.
• Our business is subject to risks associated with global sourcing and manufacturing.
• Global economic conditions and any related impact on consumer spending patterns could adversely impact our results of operations.
• Our efforts to expand internationally may not be successful.
• Risks associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct, could harm our business.
• Our franchise business is subject to certain risks not directly within our control that could impair the value of our brands.
• The market for prime real estate is competitive.
• Our business is exposed to the risks of foreign currency exchange rate fluctuations and our hedging strategies may not be effective in mitigating those risks.
• We experience fluctuations in our comparable sales and margins.
• Changes in our credit profile or deterioration in market conditions may limit our access to the capital markets and adversely impact our financial position or our business initiatives.
• Trade matters may disrupt our supply chain.
• Changes in the regulatory or administrative landscape could adversely affect our financial condition and results of operations.
• Our results could be adversely affected by natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events.
• Reductions in income and cash flow from our credit card arrangement related to our private label and co-branded credit cards could adversely affect our operating results and cash flows.
• We are subject to various proceedings, lawsuits, disputes, and claims from time to time, which could adversely affect our business, financial condition, and results of operations.