1. If the company is unable to anticipate and respond to changes in fashion trends and changing customer preferences in a timely and effective manner, the demand for its products may decline, which may have an adverse effect on its business, results of operations and prospects.
2. The company derives a significant portion of its revenues from sales to third party brand owners, wholesalers and through online retailers. Any failure to maintain relationships with such third parties could adversely affect its business,
results of operations and financial condition.
3. The company is dependent on its contract manufacturers to procure the company products and does not have any manufacturing facilities of its own. The company's business is therefore dependent to a large extent on expected performance and operation of its contract manufacturer partners.
4. If any new products or brands that the company launch are not as successful as its anticipate, The company's business, results of operations and financial condition may be adversely affected.
5. If the company is unable to procure raw materials, finished products and packing material of the required quality and quantity, at competitive prices, its business, results of operations and financial condition may be adversely affected.
6. The company conduct its business activities on a purchase order basis and therefore, have not entered into long-term agreements with its customers.
7. Any failure in the quality control processes by its contract manufacturers may adversely affect the company's business, results of operations and financial condition. The company may faces product liability claims and legal proceedings if the quality of products supplied by its manufacturers does not meet its customers' expectations.
8. Its warehouse and a majority of the company contract manufacturers are exclusively based in a single geographical region. This may expose its manufacturing processes and the company supply chain to regional risks, which may adversely affect its business, financial condition and results of operations.
9. Its operations could be adversely affected by labour shortages, strikes, work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees.
10. Pricing pressure from its competitors may affect its ability to maintain or increase the company product prices and, in turn, its revenue from product sales, gross margin and profitability, which may materially and adversely affect its business, financial condition and results of operations.