As filed with the Securities and Exchange Commission on February 14, 2020

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Cole Haan, Inc.

(Exact name of registrant as specified in its charter)

150 Ocean Road

Greenland, New Hampshire 03840

(603) 430-7800

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Laura W. Kelley

Senior Vice President, Legal, Human Resources & General Counsel

Cole Haan, Inc.

150 Ocean Road

Greenland, New Hampshire 03840

(603) 430-7800

(Name, address, including zip code, and telephone number, including area code, of registrant’s agent for service)

With copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☒

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities nor a solicitation of an offer to buy these securities in any jurisdiction where the offer and sale is not permitted.

Subject to completion, dated February 14, 2020

Prospectus

            Shares

COLE HAAN, INC.

Common Stock

This is the initial public offering of common stock of Cole Haan, Inc. The selling stockholders named in this prospectus are offering                  shares of our common stock. We will not be selling any shares in this offering and will not receive any proceeds from the sale of our common stock by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. We expect that the initial public offering price of our common stock will be between $        and $        per share. We intend to apply to list our common stock on the NASDAQ Global Select Market, or NASDAQ, under the symbol “CLHN”.

We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, or the Securities Act, and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Summary—Implications of Being an Emerging Growth Company.” After the completion of this offering, funds advised by Apax Partners LLP and Apax Partners, L.P. will continue to own a majority, approximately     %, of the shares eligible to vote in the election of our directors. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of NASDAQ. See “Management—Controlled Company Exemption.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 19 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission, or the SEC, nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

To the extent that the underwriters sell more than                  shares of our common stock, the underwriters have the option, for a period of 30 days from the date of this prospectus, to purchase up to             additional shares of our common stock from the selling stockholders at the initial public offering price, less the underwriting discount. We will not receive any proceeds from the sale of our common stock by the selling stockholders pursuant to any exercise of the underwriters’ option to purchase additional shares.

The underwriters expect to deliver the shares against payment in New York, New York on or about                     , 2020.

                    , 2020

COLE HAAN

Nearly a century in the making, Cole Haan stands for a simple and powerful idea—we all seek to live extraordinary lives on our own terms. Since our founding in 1928 by Trafton Cole and Eddie Haan, Cole Haan has been worn by extraordinary people—from artists and astronauts, to poets and presidents—who have given the brand its enduring values. Cole Haan transcends genders, generations, cultures and socioeconomic status. As a values-based brand, we deliver ground-breaking products and digital marketing that resonate and aim to inspire our customers to extraordinary living. To be fearless. To blaze trails and shatter boundaries. To earn what cannot be bought. The future isn’t making itself. So we’re building our vision into a reality. We know that the best way to honor a past like ours, is to thoughtfully, and passionately work to create an extraordinary tomorrow. For our customers, our partners, our investors, and ourselves. This is Cole Haan

Ground-breaking innovation WATERPROOF Waterproof premium leathers combine with considered WEATHER-READY construction to deliver the ultimate protection against An insulated lining keeps the the elements. heat inside and the chill at bay. IDEAL FIT An anatomically engineered footbed cradles the foot, for better weight distribution and TIMELESS DURABILITY supreme all-day comfort. A perimeter layer of rubberized material protects high-wear areas. STEADY TRACTION TPU outsole with a rugged tread pattern provides superior grip and durability. RESPONSIVE CUSHIONING Three tiers of GRANDFØAM start softest in the area of greatest impact and get firmer as they move outward, for comfort and stability that adapt to every step. 4.ZERØGRAND Hiker

Cole Haan at a glance
COLE HAAN
GRAND SHOP

$687M $33M 30% Revenue1 Net Income1 Sales from +14% vs FY18 +43% vs FY18 Digital Commerce1 64 360+ 450+ Countries of Stores Wholesale Distribution1 Globally1 Accounts Globally1 61M 400+ Visits to North America Patents Issued DTC Channels1 or Pending2 +31% vs FY18

TABLE OF CONTENTS

You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. This prospectus is an offer to sell only the shares offered hereby, but only under the circumstances and in jurisdictions where it is lawful to do so. Neither we, the selling stockholders nor the underwriters have authorized anyone to provide you with different information. The information in this prospectus or in any applicable free writing prospectus is accurate only as of its date, regardless of the time of delivery of this prospectus, or any free writing prospectus, as the case may be, or any sale of shares of our common stock.

For investors outside the United States: The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.

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INDUSTRY AND MARKET DATA

Within this prospectus, we reference information and statistics regarding the footwear and lifestyle accessories industries, as well as the consumer marketplace generally. We have obtained this information and statistics from various independent third-party sources, including independent industry publications, reports by market research firms and other independent sources, such as eMarketer (Oct. 2018), Euromonitor International Limited and The NPD Group/ Retail Tracking Service/ Dollar Sales Adjusted for Men’s and Women’s/ January-December 2016-2018. The industry data presented in this prospectus related to the size of the global footwear (excluding children’s footwear) and lifestyle accessories markets is based on data from Euromonitor International Limited’s Apparel and Footwear, 2019 edition, 2018 fixed exchange rates, and includes bags and eyewear data from Personal Accessories and Eyewear 2020 editions, 2019 fixed exchange rates. All market sizing data is based on retail sales in absolute dollar terms and reflects current prices by Euromonitor. The size of the international footwear market reflects Euromonitor’s men’s and women’s global footwear market (excluding children’s footwear), net of the U.S. and Canadian footwear markets. Some data and other information contained in this prospectus, such as those relating to use occasions, are also based on management’s estimates and calculations, which are derived from our review and interpretation of internal surveys and independent sources. Data regarding the industries in which we compete and our market position and market share within these industries are inherently imprecise and are subject to significant business, economic and competitive uncertainties beyond our control, but we believe they generally indicate size, position and market share within these industries. While we believe such information is reliable, we have not independently verified any third-party information. While we believe our internal company research and estimates are reliable, such research and estimates have not been verified by any independent source. In addition, assumptions and estimates of our and our industries’ future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Forward-Looking Statements.” As a result, you should be aware that market, ranking and other similar industry data included in this prospectus, and estimates and beliefs based on that data, may not be reliable. Neither we, the selling stockholders nor the underwriters can guarantee the accuracy or completeness of any such information contained in this prospectus.

TRADEMARKS, TRADENAMES AND SERVICE MARKS

We own a number of registered and common law trademarks and pending applications for trademark registrations in the United States and other countries, primarily through our subsidiary Cole Haan LLC and its affiliates, including, for example: COLE HAAN, ZERØGRAND, 2.ZERØGRAND, 3.ZERØGRAND, ØRIGINALGRAND, STITCHLITE, GRANDSERIES, GRAND AMBITION AND GRANDPRØ. Unless otherwise indicated, all trademarks appearing in this prospectus are proprietary to us, our affiliates and/or licensors. This prospectus also contains trademarks, tradenames and service marks of other companies, which are the property of their respective owners. Solely for convenience, the trademarks, tradenames and service marks referred to in this prospectus may appear without the ^® and ^™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, tradenames and service marks. We do not intend our use or display of other parties’ trademarks, tradenames or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

BASIS OF PRESENTATION

The following terms are used in this prospectus unless otherwise noted or indicated by the context:

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We operate on a fiscal calendar pursuant to which our fiscal year consists of 52 or 53 weeks, ending on the Saturday closest to May 31. Unless otherwise indicated or the context otherwise requires, all references to years and quarters relate to fiscal periods rather than calendar periods. Unless otherwise noted, store counts are as of June 1, 2019.

References to “fiscal year 2018” and “fiscal year 2019” relate to our fiscal years ended June 2, 2018 and June 1, 2019, respectively. References to “fiscal year 2020” relate to our fiscal year ending May 30, 2020.

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We adopted the Financial Accounting Standards Board’s, or FASB, Accounting Standards Codification, or ASC, No. 606, Revenue from Contracts with Customers, or Topic 606, effective June 3, 2018 using the modified retrospective method. The amounts reported in the consolidated statement of operations for fiscal year 2019 and the consolidated balance sheet as of June 1, 2019 reflect this adoption. According to the modified retrospective method, all financial information before June 3, 2018 was not conformed to the current period presentation. See Notes 2 and 3 to our audited consolidated financial statements included elsewhere in this prospectus for more information regarding our adoption of Topic 606.

We also adopted ASC No. 842, Leases, or Topic 842, effective June 2, 2019 using the modified retrospective method. The amounts reported in the consolidated statement of operations for the 26-week period ended November 30, 2019 and the consolidated balance sheet as of November 30, 2019 reflect this adoption. According to the modified retrospective method, all financial information before June 2, 2019 was not conformed to the current period presentation. See Notes 2 and 9 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus for more information regarding our adoption of Topic 842.

Numerical figures included in this prospectus have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

NON-GAAP FINANCIAL MEASURES

This prospectus contains “non-GAAP financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with GAAP. Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA” and “Adjusted EBITDA margin.”

Adjusted EBITDA and Adjusted EBITDA margin have been presented in this prospectus as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP, because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA and Adjusted EBITDA margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.

Adjusted EBITDA and Adjusted EBITDA margin are not recognized terms under GAAP and should not be considered as an alternative to net income as a measure of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. In addition, these measures are not intended to be a measure of free cash flow available for management’s discretionary use as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. For a discussion of the use of these measures and a reconciliation to the most directly comparable GAAP measures, see footnote (4) under “Summary—Summary Historical Consolidated Financial and Other Data.”

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LETTER FROM OUR CEO

We are advocates for extraordinary living.

Seven years ago, we began our journey as an independent company and set out to transform a classic domestic dress shoe company with a 90-year heritage into something even bigger—a global lifestyle brand serving always-connected, active professionals with innovative footwear and lifestyle accessories. Today, Cole Haan is a $1 billion global performance lifestyle brand at retail that connects with consumers primarily over digital platforms. And we’re just at the beginning of our journey.

Today’s Cole Haan was born out of a simple observation—that technology, which is reshaping our personal and professional lives in profound ways, would radically change what consumers need in footwear and lifestyle accessories in ways traditional dress footwear and accessories companies were not embracing.

Sure, people were talking about the way technology would impact the way we sell our products, but few, if any, were talking about how to reengineer those very products. We saw opportunity—in the marketplace and, specifically, with Cole Haan. And, our colleagues at Apax Partners shared in that vision. Why Cole Haan? Easy—it had a sterling reputation in a category ready for disruption.

So, in 2013, Cole Haan became an independent company for the first time in 25 years. Since then we have been successful in attracting active urban adventurers throughout the world whose lives require versatile, stylish and comfortable products that allow them to go from work-to-workout-to-weekend. These women and men have taught us a few things about how they see their lives—that no one seeks to be ordinary—that they can live extraordinary lives and impact the world in extraordinary ways if they choose.

Given this, our mission is to inspire our customers to live extraordinary lives by encouraging and supporting their personal and professional passions. We live this mission each and every day we come to work at Cole Haan. And, we make products that strive to exceed our customers’ expectations.

Our company culture is driven by a simple mantra: respect tradition enough to reinvent it. We refuse to be bound by convention when it comes to product creation and marketing at Cole Haan. Why should we? Our customers are not bound by convention when it comes to starting new businesses, finding new ways to express ideas or making human connections through new technology. This led us to the development and launch of our iconic ZERØGRAND label, which first debuted in 2014. This revolutionary idea was the first step for Cole Haan on its path to inventing a new category of performance lifestyle footwear and accessories.

Today, the Cole Haan brand is resonating across the globe. Our customers believe in the promise of our brand and are demonstrating increased demand for our breakthrough products. I am confident we are only at the beginning of our journey. With our foundational investments in place, Cole Haan is now a modern enterprise built for the digital future. I believe we have the scale and capabilities for sustainable and profitable growth. My colleagues and I are extremely proud to carry the Cole Haan legacy forward. As we move to our next chapter, we will always endeavor to do right by our customers, employees, partners, stakeholders and investors.

We encourage you to join us on our extraordinary journey.

Jack Boys

Chief Executive Officer

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below and the other information set forth in this prospectus before deciding to invest in shares of our common stock. If any of the following risks actually occurs, our business, results of operations and financial condition may be materially adversely affected. In such case, the trading price of our common stock could decline and you may lose all or part of your investment.

Risks Related to Our Business

Our success depends on our ability to maintain the value and reputation of our brand.

Our success depends in large part on the value and reputation of our brand, which is integral to our business and the implementation of our strategies for expanding our business. Maintaining, promoting and positioning our brand will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high-quality products and services, and may require us to make substantial investments in areas such as research and development, store operations, community relations and employee training. Customer complaints or negative publicity about our products, product delivery times, our sites or in-store shopping experience, customer data handling and security practices or customer support, especially on blogs, social media platforms and our sites, could rapidly and severely diminish consumer, partner and supplier confidence in us and consumer use of our sites and result in harm to our brand and reduced demand for our products. As we expand into new markets and as the environment becomes increasingly competitive, consumers in these markets may not accept our brand image and maintaining and enhancing our brand may become increasingly difficult and expensive.

Our brand value also depends on our ability to maintain a positive consumer perception of our corporate integrity and culture. Negative claims or publicity involving us, our wholesale partners, our distributors or our products, or the production methods of any of our suppliers, could seriously damage our reputation and brand image, undermine consumer confidence in our brand and reduce long-term demand for our products, regardless of whether such claims or publicity are accurate. Social media, which accelerates and potentially amplifies the scope of negative claims or publicity, can increase the challenges of responding to negative claims or publicity. Social media influencers or other endorsers of our products or third parties with whom we maintain relationships or collaborate could engage in behavior, or use their platforms to communicate directly with consumers in a manner, that reflects poorly on our brand and may be attributed to us or otherwise adversely affect us. Any harm to our brand and reputation could adversely affect our business, results of operations and financial condition.

If we fail to adequately continue to connect with our consumer base, it could have a material adverse effect on our business, results of operations and financial condition.

Our marketing and promotional programs are important in capturing the interest of consumers and attracting them to our sites and/or stores and encouraging purchases by consumers. If we fail to successfully develop and implement marketing, advertising and promotional strategies in new and existing markets, we may be unable to achieve and maintain brand awareness and consumer traffic to our sites and/or stores may be reduced.

We believe that much of the growth in our customer base to date has originated from our marketing strategy, including social media and other digital marketing efforts. For example, we maintain Facebook, Instagram, Twitter, YouTube and Snapchat accounts. We also maintain relationships with social media influencers. If we are unable to cost-effectively use social media platforms as marketing tools, our ability to acquire new customers and our financial condition may suffer. Unauthorized or inappropriate use of our social media channels could result in harmful publicity or negative consumer experiences, which could have an adverse impact on the effectiveness of our marketing in these channels. In addition, substantial negative commentary by others on social media platforms could have an adverse impact on our ability to successfully connect with consumers. Furthermore, as laws and regulations rapidly evolve to govern the use of these platforms, the failure

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by us, our employees, our network of social media influencers or third parties acting at our direction to comply with applicable laws and regulations could subject us to regulatory investigations, lawsuits, including class actions, liability, fines or other penalties and could result in a material adverse effect on our business, results of operations and financial condition. In addition, an increase in the use of social media platforms for product promotion and marketing may cause an increase in our burden to monitor compliance of such platforms, and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations. For example, in some cases, the Federal Trade Commission, or the FTC, has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. We do not prescribe what our influencers post, and if we were held responsible for the content of their posts or their actions, we could be forced to alter our practices, which could have an adverse impact on our business.

Moreover, we rely in part upon third parties, such as search engines and product reviewers, for both paid and unpaid services and we are unable to fully control their efforts. We obtain a significant amount of traffic via search engines and, therefore, rely on search engines such as Google to direct traffic to our sites. Search engines frequently update and change the algorithm that determines the placement and display of a user’s search results, such that the purchased or algorithmic placement of links to our site may be negatively affected. A search engine could, for competitive or other purposes, alter its algorithms or results in a manner that negatively affects our paid or non-paid search ranking and competitive dynamics, limiting the effectiveness of search engine marketing or search engine optimization.

As digital commerce and social networking continue to rapidly evolve, we must continue to establish relationships with these channels and may be unable to develop or maintain these relationships on acceptable terms. If we are unable to cost-effectively drive traffic to our stores and sites, our ability to acquire and retain customers and our financial condition would suffer.

Furthermore, we establish relationships with public figures to promote our products, as well as to establish product authenticity with consumers. However, as competition in our industry has evolved, the costs associated with establishing and retaining such relationships have increased. If we are unable to maintain our current associations with public figures, or to do so at a reasonable cost, we could lose the visibility associated with our products, and we may be required to modify and substantially increase our marketing investments. As a result, our brand, sales, expenses and profitability could be harmed. In addition, a failure to continue to correctly identify promising public figures to use and endorse our products or a failure to enter into cost-effective endorsement arrangements with prominent public figures could adversely affect our brand, sales and profitability.

Changes in the amount and degree of promotional intensity or merchandising strategy by our competitors could cause us to have difficulties in retaining existing customers and attracting new customers. If the efficacy of our marketing or promotional activities declines, if we are not able to cost-effectively manage our marketing expenses, if such activities of our competitors are more effective than ours, or if for any other reason we lose the loyalty of our customers, it could have a material adverse effect on our business, results of operations and financial condition.

An overall decline in the health of the economy and other factors impacting consumer spending, such as natural disasters and fluctuations in inflation and foreign currency exchange rates may affect consumer purchases, reduce demand for our products and materially harm our business, results of operations and financial condition.

Our business depends on consumer demand for our products and, consequently, is sensitive to a number of factors that influence consumer confidence and spending, such as general current and future economic and political conditions, consumer disposable income, energy and fuel prices, recession and fears of recession, unemployment, minimum wages, availability of consumer credit, consumer debt levels, conditions in the housing

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market, interest rates, tax rates and policies, inflation, war and fears of war, inclement weather, natural disasters, terrorism, active shooter situations, outbreak of viruses, widespread illness, infectious diseases, contagions and the occurrence of unforeseen epidemics (including the outbreak of the coronavirus and its potential impact on our financial results) and consumer perceptions of personal well-being and security.

Consumer purchases of discretionary items such as footwear, apparel and accessories, including our products, often decline during periods when economic or market conditions are unstable or weak. Reduced consumer confidence and spending cutbacks may result in reduced demand for our merchandise, which could result in lost sales and/or excessive markdowns. Reduced demand also may require increased selling and promotional expenses, impacting our profitability. Changes in areas around our store locations that result in reductions in consumer foot traffic or otherwise render the locations unsuitable could cause our sales to be less than expected. Prolonged or pervasive economic downturns could slow the pace of new store openings, reduce comparable sales or cause us to close certain stores, which could have a material negative impact on our financial performance. When the retail economy weakens or as consumer behavior shifts, retailers may be more cautious with orders. A slowing or changing economy in our key markets could adversely affect the financial health of our wholesale partners, which in turn could have an adverse effect on our results of operations and financial condition.

Our plans to improve and expand our product offerings may not be successful, and implementation of these plans may divert our operational, managerial and administrative resources, which could harm our competitive position and reduce our revenue and profitability.

We plan to grow our business by, among other things, scaling our core franchises, growing our offerings in Sport, Casual and Outdoor use occasions and expanding our lifestyle accessories products. The principal risks to our ability to successfully carry out our strategy are that:

In addition, our ability to successfully carry out our plans to improve and expand our product offerings may be affected by economic and competitive conditions, changes in consumer spending patterns and changes in consumer preferences and style trends. These plans could be abandoned and could cost more than anticipated, any of which could impact our competitive position and reduce our revenue and profitability.

We rely on technical innovation and high-quality products to compete in the market for our products.

Technical innovation and quality control in the design and manufacturing process of footwear and lifestyle accessories is essential to the commercial success of our products. Research and development play a key role in technical innovation. If we fail to introduce technical innovation in our products, we may not be able to generate sufficient consumer interest in our products to remain competitive, and if we experience problems with the

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quality of our products, we may incur substantial expense to remedy such issues and our brand may be adversely affected. Our results of operations would also suffer if our innovations do not respond to the needs of our consumers, are not appropriately timed with market opportunities or are not effectively brought to market.

Our business is highly dependent upon our ability to identify and respond to new and changing consumer trends and preferences to accurately forecast demand.

Consumer tastes are volatile and can change rapidly. Our success depends in large part upon our ability to effectively identify and respond to changing consumer demands and to translate these trends and demands into appropriate, saleable product offerings in a timely, cost-efficient manner. In addition, we must create products at a range of price points that appeal to the consumers of both our sites and stores and our wholesale partners and distributors across our diverse geographic regions.

Our failure to identify and react appropriately to new and changing trends or consumer preferences or to accurately forecast demand for certain product offerings could lead to, among other things, excess inventories or inventory shortages, higher markdowns and write-offs of unsold merchandise. This could have an adverse effect on the image and reputation of our brand and could adversely affect our gross margins. If consumers no longer find our offerings appealing, or if we are unable to timely update our offerings to meet current trends and consumer demands, consumers may make fewer or less valuable purchases in the future. A decrease in the number of customers who make repeat purchases or a decrease in their spending could negatively impact our results of operations. Further, our future success will depend in part on our ability to increase sales to our existing customers over time and to attract new customers to our brand, and if we are unable to do so, our business, results of operations and financial condition may be materially adversely affected. If we fail to generate repeat purchases or maintain high levels of consumer engagement and average order value, our business, growth prospects, results of operations and financial condition could be materially adversely affected.

In addition, consumer preferences regarding the shopping experiences, including where and how they shop, continue to rapidly evolve. If we or our wholesale partners do not provide consumers with an attractive in-store experience or an engaging and user-friendly digital commerce platform, demand for our products may decrease and our brand image, business, results of operations and financial condition may be adversely affected.

We operate in highly competitive markets, and may lose market share if we do not compete successfully.

The footwear and lifestyle accessories markets are highly competitive and fragmented. We compete against a wide range of designers and manufacturers of footwear and lifestyle accessories, both domestic and international, across a wide range of retail price points. We also compete with other companies for the production capacity of suppliers that manufacture our products. See “Business—Our Competition.” Competition may result in pricing pressure, reduced profit margins or lost market share or a failure to grow our market share, any of which could substantially harm our business, results of operations and financial condition. The retail landscape is changing as a result of changes in consumers’ shopping habits, as well as technical innovation in the design and manufacturing process within the retail industry.

Some of our competitors are larger companies and have greater financial and operational resources, stronger brand recognition and broader geographic presence than we do. As a result, they may be able to engage in extensive and prolonged price promotions or otherwise offer more competitive prices than we do, which may adversely affect our business. They may also be able to spend more than we do for advertising and social media promotion. We may be at a substantial disadvantage to larger competitors with greater economies of scale. If our costs are greater compared to those of our competitors, the pricing of our products may not be as attractive, thus depressing sales or the profitability of our products. Our competitors may expand into markets in which we currently operate and we remain vulnerable to the marketing power and high level of consumer recognition of these larger competitors and to the risk that these competitors or others could attract our consumer base. In addition, if any of our competitors were to consolidate operations, such consolidation would exacerbate the aforementioned risks.

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In addition, retailers have limited resources and floor space, and we must compete with others to develop relationships with them. Increased competition by existing and future competitors could result in reductions in floor space in retail locations, reductions in sales or reductions in the prices of our products, and if retailers have better sell through or earn greater margins from our competitors’ products, they may favor the display and sale of those products.

Our failure to successfully manage our digital commerce business could adversely impact our business and profitability.

In addition to our product expansion strategy, we plan to continue to expand our digital platforms through marketing and other investments to drive new customer acquisition and retention and grow our sales to digital retailers.

As a digital commerce retailer, we encounter risks and difficulties frequently experienced by Internet-based businesses. The successful operation of our digital commerce business, as well as our ability to provide a positive shopping experience that will generate orders and drive subsequent visits, depends on operating an appealing digital platform and efficient and uninterrupted operation of our order-taking and distribution operations. Risks associated with our digital commerce businesses include:

We expect to keep up to date with competitive technology trends, which may include the use of new or improved technology, creative user interfaces and other digital commerce marketing tools such as paid search and mobile applications, among others. In addition, the number of people who access the Internet through devices other than personal computers, including mobile phones, smartphones, notebooks, tablets, video game consoles and television set-top devices, has increased dramatically in the past few years. The smaller screen size, functionality and memory associated with some alternative devices may make the use of our sites and purchasing our products more difficult. The versions of our sites developed for these devices may not be compelling to consumers. As new mobile devices and platforms are released, it is difficult to predict the problems we may encounter in developing applications for alternative devices and platforms and we may need to devote significant resources to the creation, support and maintenance of such applications. If we are unable to attract consumers to our sites through these devices or are slow to develop a version of our sites that is more compatible with alternative devices, we may fail to capture a significant share of consumers in the markets in which we operate, which could adversely affect our business. It is time consuming and costly to keep pace with rapidly changing and continuously evolving technology and our efforts may not increase sales or attract customers.

Our competitors, some of whom have greater resources than we do, may also be able to benefit from changes in digital commerce technologies, which could harm our competitive position. If we are unable to allow

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real-time and accurate visibility to product availability when consumers are ready to purchase, quickly and efficiently fulfill their orders using the distribution and payment methods they demand, provide a convenient and consistent experience for customers regardless of the ultimate sales channel or effectively manage our digital commerce sales, our ability to compete and our results of operations could be adversely affected.

Furthermore, if our digital commerce business and/or our sales to digital retailers successfully grow, they may do so in part by attracting existing customers, rather than new customers, who choose to purchase products from us or our wholesale partners online rather than from our brick and mortar stores, thereby detracting from the financial performance of our stores.

If we fail to open and operate new stores in a timely and cost-effective manner or fail to successfully enter new markets, our financial performance could be materially and adversely affected.

Our growth strategy depends on growing our store base and expanding our operations in existing and new geographic regions and operating our new stores successfully. We cannot assure you that our contemplated expansion will be successful.

Our ability to successfully open and operate new stores depends on many factors, including, among others, our ability to:

Our failure to effectively address challenges such as these could adversely affect our ability to successfully open and operate new stores in a timely and cost-effective manner. Further, we will have pre-operating costs and we may have initial losses while new stores commence operations.

In addition, there can be no assurance that newly opened stores will achieve sales or profitability levels comparable to those of our existing stores in the time periods estimated by us, or at all. We may not be able to maintain the levels of North America DTC comparable sales that we have experienced recently. A variety of factors affect North America DTC comparable sales, including consumer trends, competition, current economic conditions, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, the success of marketing programs and weather conditions. These factors may cause our North America DTC comparable sales results to be materially lower than recent periods and our expectations, which could harm our results of operations. If our stores fail to achieve, or are unable to sustain, acceptable total

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sales and profitability levels, our business may be materially harmed and we may incur significant costs associated with the early closure of such stores. Our plans to accelerate the growth of our store base may increase this risk.

Accordingly, we cannot assure you that we will achieve our planned growth or, even if we are able to grow our store base as planned, that our new stores will perform as expected. Our failure to implement our growth strategy and to successfully open and operate new stores in the time frames and at the costs estimated by us could have a material adverse effect on our business, results of operations and financial condition.

We are dependent on domestic and international wholesale partners for a significant portion of our sales.

We derive significant revenue from our network of domestic and international wholesale partners, consisting of digital pureplay retailers, specialty retailers and department stores, among others. A decision by any of our major wholesale partners, whether motivated by marketing strategy, competitive conditions, financial difficulties or otherwise, to decrease significantly the amount of merchandise purchased from us or our licensing partners, or to change their manner of doing business with us or our licensing partners, could substantially reduce our revenue and have a material adverse effect on our profitability. In addition, store closings by our wholesale partners shrink the number of doors carrying our products, while the remaining stores may purchase a smaller amount of our products and/or may reduce the retail floor space designated for our products. We also rely on our wholesale partners to train their employees with respect to our products and to ensure a successful consumer experience. If any disputes with our wholesale partners arose, if we were to lose any of our key wholesale partners or if any of our key wholesale partners consolidate and/or gain greater market power, our business, results of operations and financial condition may be materially adversely affected. In addition, we may be similarly adversely impacted if any of our key wholesale partners experience any operational difficulties or generate less traffic.

We enter into vendor agreements with our wholesale partners whereby we negotiate and agree on, among other things, packaging, delivery and cancellation terms. However, there is no minimum guaranty or commitment to purchase from our wholesale partners. As a result, we rely on our wholesale partners’ continuing demand for our products and our position in the market for all purchase orders. To assist in the scheduling of production and the shipping of our products, we offer our wholesale partners the opportunity to place orders five to six months ahead of delivery under our futures ordering program. These advance orders may be canceled under certain conditions, and the risk of cancellation may increase when dealing with financially unstable retailers or retailers struggling with economic uncertainty. In addition, certain of our wholesale partners, particularly those located in the United States, have become highly promotional and have aggressively marked down their merchandise. Such promotional activity could negatively impact our business. If our wholesale partners change their pricing and margin expectations, change their business strategies as a result of industry consolidation or otherwise, maintain and seek to grow their own private-label competitive offerings, reduce the number of brands they carry or amount of shelf space they allocate to our products, or allocate greater shelf space to, or increase their advertising or promotional efforts for, our competitors’ products, our sales could decrease and our business, results of operations and financial condition may be materially adversely affected.

Certain of our wholesale partners may from time to time experience financial difficulties, including bankruptcy or insolvency. If our wholesale partners suffer significant financial difficulty, they may reduce their orders from us or stop purchasing from us and/or be unable to pay the amounts due to us timely or at all, which could have a material adverse effect on our ability to collect on receivables and our results of operations. It is possible that wholesale partners may contest their contractual obligations to us under bankruptcy laws or otherwise. Further, we may have to negotiate significant discounts and/or extended financing terms with these wholesale partners in such a situation. If we are unable to collect upon our accounts receivable as they come due in an efficient and timely manner, our business, results of operations and financial condition may be materially adversely affected. In addition, product sales are dependent in part on high-quality merchandising and an appealing retail environment to attract consumers, which requires continuing investments by retailers. Retailers

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that experience financial difficulties may fail to make such investments or delay them, resulting in lower sales and orders for our products. We also face risk from international wholesale partners that file for bankruptcy protection in foreign jurisdictions, as the application of foreign bankruptcy laws may be more difficult to predict.

Consolidations among our wholesale partners would concentrate our credit risk with a relatively small number of retailers, and, if any of these retailers were to experience a shortage of liquidity or consumer behavior shifts away from traditional retail, it would increase the risk that their outstanding payables to us may not be paid. In addition, increasing market share concentration among one or a few retailers in a particular country or region increases the risk that if any one of them substantially reduces their purchases of our products, we may be unable to find a sufficient number of other retail outlets for our products to sustain the same level of sales and revenue.

Our business is subject to risks associated with our international distribution partners.

We rely on our international distributors to understand local market conditions, to diligently sell our products and to comply with local laws and regulations, including applicable anti-bribery and anti-corruption laws. The operation of local laws and our agreements with distributors can make it difficult for us to change quickly from a distributor who we feel is underperforming. If we do terminate an independent distributor, we may lose our customers who have been dealing with that distributor. We do not have local staff in many of the areas covered by independent distributors, which may make it difficult for us to monitor our distributors’ performance. Actions by independent distributors that are beyond our control could result in flat or declining sales in that geography, harm to our reputation or our products or legal liability. In addition, our international expansion depends on our ability to identify and maintain regional distributor relationships in new and existing geographies, and our failure to so identify and maintain such relationships may adversely affect our growth and financial performance.

We are subject to the risk our licensees may not generate expected sales or maintain the value of our brands.

We currently license, and expect to continue licensing, certain of our proprietary rights, such as trademarks, to third parties. If our licensees fail to successfully market and sell licensed products, or fail to obtain sufficient capital or effectively manage their business operations, customer relationships, labor relationships, supplier relationships or credit risks, it could adversely affect our revenue, both directly from reduced royalties received and indirectly from reduced sales of our other products.

We also rely on our licensees to help preserve the value of our brand. Although we attempt to protect our brand through approval rights over the design, production processes, quality, packaging, merchandising, distribution, advertising and promotion of our licensed products, we cannot completely control the use of our licensed brand by our licensees. Although we make efforts to police the use of our trademarks by our licensees, we cannot assure you that these efforts will be sufficient to ensure that our licensees abide by the terms of their licenses. In the event that our licensees fail to do so, our trademark rights could be harmed. Moreover, the misuse of our brand by, or negative publicity involving, a licensee could have a material adverse effect on our brand and on us.

We may not be able to adequately protect our intellectual property and we may be accused of infringing intellectual property or other proprietary rights of third parties, which could harm the value of our brand and adversely affect our business.

We rely on a combination of patents, trademarks, trade secrets and contractual provisions to protect our intellectual property. Patents and our other intellectual property rights are important to our business and our ability to compete effectively with other companies. Our efforts to protect our intellectual property and other proprietary rights may not be sufficient. We cannot be sure that:

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In addition, our ability to enforce and protect our intellectual property rights may be limited in certain countries outside the United States because of the differences in foreign laws concerning proprietary rights, which could make it easier for competitors to capture a market position in such countries by utilizing technologies and products that are similar to those developed or owned by or licensed to us.

We rely on our trademark registrations and common law trademark rights to distinguish our products from the products of our competitors, and have registered or applied to register many of our trademarks. We cannot assure you that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition. Furthermore, there are jurisdictions that do not recognize common law trademark rights, and third parties in these jurisdictions may register marks similar or identical to our own and sue us to preclude our use of these trademarks. Moreover, common law trademarks may be more difficult to enforce than registered trademarks in the United States because they are not entitled to, among other things, a presumption of ownership and exclusive rights on a nationwide basis, and certain statutory remedies (including the right to record the marks with the U.S. Customs and Border Patrol to block importation of infringing goods from overseas). In addition, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to fully enforce our trademarks.

Moreover, we cannot guarantee we will successfully enjoin infringers. We periodically discover counterfeit reproductions of our products or products that otherwise infringe our intellectual property rights. If we are unsuccessful in enforcing our intellectual property rights, continued sales of these products could adversely affect our sales and our brand and could result in a shift of consumer preference away from our products. Competitors also may harm our sales by designing products that mirror the capabilities of our products without infringing or otherwise violating our intellectual property rights. Confidentiality or other agreements to which we are a party may be breached, and the remedies thereunder may not be sufficient to protect our rights. Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition. Any litigation to enforce our rights could be costly, divert attention of management, and may not be successful.

We are also at risk of claims by others that we have infringed their copyrights, trademarks or patents, or improperly used or disclosed their trade secrets, or otherwise infringed or violated their proprietary rights, such as the right of publicity. The costs of supporting any litigation or disputes related to these claims can be considerable, and we cannot assure you that we will achieve a favorable outcome of any such claim. If any such claim is valid, we may be compelled to cease sale of certain products and/or our use of such proprietary rights, enter into royalty or licensing agreements in order to obtain the right to use a third-party’s intellectual property, pay damages or indemnify our wholesale partners, which could adversely affect our business, results of operations and financial condition. Even if such claims were not valid, defending them could be expensive and distracting.

We may not be able to successfully implement our growth strategies on a timely basis or at all.

Our future success depends, in large part, on our ability to implement our growth strategies, including expanding our product offerings to earn more share of customers’ closets, continuing to engage in customer

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acquisition and retention efforts that drive long-term customer relationships and continuing to grow our North America DTC, North America wholesale and International businesses. Our ability to implement these growth strategies depends, among other things, on our ability to:

We may not be able to successfully implement our growth strategies and may need to change them. If we fail to implement our growth strategies or if we invest resources in a growth strategy that ultimately proves unsuccessful, our business, results of operations and financial condition may be materially and adversely affected.

Our growth strategies could strain our existing resources and cause our performance to suffer.

We continue to experience rapid growth in our headcount and operations, which will continue to place significant demands on our management and our operational and financial resources. Our organizational structure may become more complex as we add additional staff, and as we continue to grow, we must effectively integrate, develop and motivate a large number of employees. To attract top talent, we have had to offer, and believe we will need to continue to offer, competitive compensation packages. Furthermore, we may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and results of operations may be adversely affected.

In addition, if we do not effectively manage the growth of our business and operations, the quality of our products and the pace of innovation could suffer, which could negatively affect our brand, business, results of operations and financial condition. To effectively manage our growth, we will need to continue to improve our operational, financial and management controls, and our reporting systems and procedures, by, among other things:

These systems enhancements and control improvements will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to implement these improvements effectively, our ability to manage our growth and comply with the rules and regulations that are applicable to public companies will be impaired.

We will require significant capital to fund our expanding business. If we are unable to maintain sufficient levels of cash flow from our operations, we may not be able to execute or sustain our growth strategy or we may require additional financing, which may not be available to us on satisfactory terms or at all.

To support our expanding business and execute our growth strategy, we will need significant amounts of capital, including funds to pay our lease obligations, build out new store spaces, purchase inventory, expand our

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distribution and fulfillment network, pay personnel and further invest in our infrastructure and facilities. Further, our plans to grow our store base may create cash flow pressure if new locations do not perform as projected. In the past, we have primarily depended on cash flow from operations to fund our business and growth plans. Upon the closing of this offering, we expect that we will continue to primarily depend on cash flow from operations to fund our business and growth plans. If we do not generate sufficient cash flow from operations, we may need to obtain additional equity or debt financing. Tightening in the credit markets, low liquidity, volatility in the capital markets and lack of confidence in the equity market could result in diminished availability of credit and higher cost of borrowing, making it more difficult to obtain additional financing on terms that are favorable to us, if at all. If such financing is not available to us, or is not available on satisfactory terms, our ability to operate and expand our business could be curtailed and we may need to delay, limit or eliminate planned product expansion or introduction, marketing initiatives, store openings or operations, digital expansion or other elements of our growth strategy.

Our international business operations are subject to risks and uncertainties, including risks arising from currency exchange rate fluctuations, which could adversely affect our operating results.

Our operations outside the United States are subject to certain legal, regulatory, social, political and economic risks inherent in international business operations, including, without limitation:

Doing business in multiple countries requires us to comply with the laws and regulations of the U.S. government and various non-U.S. jurisdictions. Our failure to comply with these rules and regulations may

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expose us to liabilities. These laws and regulations may apply to us, individual directors, officers, employees and agents, and may restrict our operations, trade practices, investment decisions and partnering activities. In particular, we are subject to the FCPA, the Bribery Act and other anti-bribery and anti-corruption laws, rules and regulations around the world. The anti-bribery laws generally prohibit covered entities and their intermediaries from engaging in bribery or making other prohibited payments, offers or promises to foreign officials for the purpose of obtaining or retaining business or other advantages. In addition, the FCPA and other anti-bribery and anti-corruption laws impose recordkeeping and internal controls requirements on publicly traded corporations and their foreign affiliates. We face significant risks if we fail to comply with the FCPA and other laws that prohibit improper payments, offers or promises of payment to foreign governments and their officials and political parties by us and other business entities for the purpose of obtaining or retaining business or other advantages. In many foreign countries, particularly in countries with developing economies, it may be a local custom that businesses operating in such countries engage in business practices that are prohibited by the FCPA or other similar laws and regulations. Despite our training and compliance programs, our internal control policies and procedures may not always protect us from violating anti-corruption laws or from acts committed by our employees or by third parties, including, but not limited to, our wholesale partners and distributors. Therefore, there can be no assurance that our employees, agents, wholesale partners and distributors have not and will not take actions that violate our policies or applicable laws, for which we may be ultimately held responsible. Any violation of anti-bribery and anti-corruption laws or allegation of such violations could result in severe criminal or civil sanctions, which could have a material adverse effect on our reputation, business, results of operations and financial condition.

We are also exposed to a variety of market risks, including the effects of changes in foreign currency exchange rates. If the U.S. dollar strengthens in relation to the currencies of other countries where we sell our products, our U.S. dollar reported revenue and income will decrease. In addition, we incur significant costs in foreign currencies and a fluctuation in those currencies’ value can negatively impact manufacturing and selling costs. Changes in the relative values of currencies occur regularly and, in some instances, could have an adverse effect on our results of operations and financial condition.

In addition, certain of these risks may be heightened as a result of changing political climates. The U.S. government has threatened substantial changes to trade agreements and has raised the possibility of imposing significant increases on tariffs on goods imported into the United States, particularly from China. The imposition of additional tariffs by the United States could result in the adoption of tariffs by other countries, leading to a global trade war. For example, throughout 2018 and 2019, the United States and China have been levying tariffs on their respective imports. Such tariffs could have a significant impact on our business. While we may attempt to renegotiate prices with suppliers or diversify our supply chain in response to tariffs, such efforts may not yield immediate results or may be ineffective. We might also consider increasing prices to the end consumer; however, this could reduce the competitiveness of our products and adversely affect revenue. If we fail to manage these dynamics successfully, our gross margins and profitability could be adversely affected.

Further, the United Kingdom’s intended withdrawal from the European Union, or Brexit, has created political and economic uncertainty, particularly in the United Kingdom and the European Union, and this uncertainty may last for years. Our and our distributors’ and wholesale partners’ business could be affected during this period of uncertainty, and perhaps longer, by the impact of Brexit. In addition, our and our distributors’ and wholesale partners’ business could be negatively affected by new trade agreements between the United Kingdom and other countries, including the United States and by the possible imposition of trade or other regulatory barriers in the United Kingdom.

The outbreak, and threat or perceived threat of outbreak, of the coronavirus may negatively impact our sourcing and manufacturing operations and consumer spending, which could adversely affect our business, results of operations and financial condition.

The outbreak of the coronavirus in Greater China could adversely affect our business, results of operations and financial condition. The coronavirus outbreak may materially impact our sourcing and manufacturing

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operations as a portion of our products are manufactured in China and materials for our products are sourced in China by our manufacturers within Greater China and in other affected regions. Travel within China and into other countries may be restricted, which may impact our manufacturers’ ability to obtain necessary materials and inhibit travel of our and our manufacturers’ and material suppliers’ employees, which may in turn reduce our work force and that of our manufacturers and material suppliers. As a result of such reduced workforces, potential factory closures, inability to obtain materials, disruptions in the supply chain and potential disruption of transportation of goods produced in China or other countries adversely impacted by the coronavirus outbreak, or threat or perceived threat of such outbreak, we may be unable to obtain adequate inventory or samples sources from these regions, which could adversely affect our business, results of operations and financial condition. Furthermore, our existing suppliers, such as our suppliers located in India and Vietnam, or new suppliers or sources of materials may pass the increase in sourcing costs due to the coronavirus outbreak to us through price increases, thereby impacting our margins. Material changes in the pricing practices of our suppliers could negatively impact our profitability.

In addition, as of February 14, 2020, one of our distributors operates 18 stores in Greater China and has temporarily closed certain locations while its remaining locations are operating with reduced hours and experiencing significantly reduced consumer foot traffic, which we expect will result in lost sales. Moreover, our business, results of operations and financial condition could be further adversely affected if the coronavirus outbreak expands to other countries where we have a significant number of stores, partnerships with regional distributors and wholesalers and/or sourcing and manufacturing operations. If the retail economy weakens and/or consumer behavior shifts due to the coronavirus outbreak or threat or perceived threat of such outbreak, we or our distributors may need to significantly reduce or limit store operations and/or close additional stores and retailers may be more cautious with orders. A slowing or changing economy in the regions adversely affected by the coronavirus outbreak could adversely affect the financial health of our distributors and wholesale partners, which in turn could have an adverse effect on our business, results of operations and financial condition. While this global health emergency is expected to be temporary, the duration and intensity of the disruption is uncertain, including potential broader impacts outside of China if travel and tourist traffic is further restricted and there is a resulting decline in Chinese tourist spending in other regions.

Our products are subject to risks associated with sourcing and manufacturing.

We do not own or operate any of the manufacturing facilities for our products and rely on a concentrated number of international independent suppliers to manufacture all of the products we sell. We source our footwear and selected lifestyle accessories from 12 suppliers across Vietnam, India and China, with our largest supplier representing 27% of the total footwear units we purchased in fiscal year 2019. For our business to be successful, our suppliers must provide us with quality products in substantial quantities, in compliance with regulatory requirements, at acceptable costs and on a timely basis. Our ability to obtain a sufficient selection or volume of merchandise on a timely basis at competitive prices could suffer as a result of any deterioration or change in our supplier relationships or events that adversely affect our suppliers.

There can be no assurance we will be able to detect, prevent or fix all defects that may affect our products manufactured by our suppliers. Failure to detect, prevent or fix defects, or the occurrence of real or perceived quality or safety problems or material defects in our current and future products, could result in a variety of consequences, including a greater number of product returns than expected from customers and our wholesale partners, litigation, product recalls and credit, warranty or other claims, among others, which could harm our brand, results of operations and financial condition. Such problems could hurt our brand image, which is critical to maintaining and expanding our business. Any negative publicity or lawsuits filed against us related to the perceived quality and safety of our products could harm our brand and decrease demand for our products.

If one or more of our significant suppliers were to sever their relationship with us or significantly alter the terms of our relationship, including due to changes in applicable trade policies, we may not be able to obtain replacement products in a timely manner, which could have a material adverse effect on our business, results of operations and financial condition. In addition, if any of our primary suppliers fail to make timely shipments, do not meet our quality standards or otherwise fail to deliver us product in accordance with our plans, there could be a material adverse effect on our results of operations.

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Our contractors and suppliers buy raw materials and are subject to wage rates that are oftentimes regulated by the governments of the countries in which our products are manufactured. The raw materials used to manufacture our products are subject to availability constraints and price volatility. There could be a significant disruption in the supply of fabrics or raw materials from current sources or, in the event of a disruption, our suppliers might not be able to locate alternative suppliers of materials of comparable quality at an acceptable price or at all. Our business is dependent upon the ability of our unaffiliated suppliers to locate, train, employ and retain adequate personnel. Our unaffiliated suppliers have experienced, and may continue to experience in the future, unexpected increases in work wages, whether government-mandated or otherwise. Our suppliers may increase their pricing if their raw materials became more expensive. Our suppliers may pass the increase in sourcing costs to us through price increases, thereby impacting our margins. Material changes in the pricing practices of our suppliers could negatively impact our profitability.

In addition, we cannot be certain that our unaffiliated suppliers will be able to fill our orders in a timely manner. If we experience significant increases in demand, or reductions in the availability of materials, or need to replace an existing supplier, there can be no assurance additional supplies of fabrics or raw materials or additional manufacturing capacity will be available when required on terms acceptable to us, or at all, or that any supplier would allocate sufficient capacity to us in order to meet our requirements. In addition, even if we are able to expand existing or find new manufacturing or sources of materials, we may encounter delays in production and added costs as a result of the time it takes to train suppliers in our methods, products, quality control standards and labor, health and safety standards. Any delays, interruption or increased costs in labor or wages, or the supply of materials or manufacture of our products, could have an adverse effect on our ability to meet wholesale partner and customer and consumer demand for our products and result in lower revenue and net income both in the short and long term.

Events that adversely impact our suppliers could impair our ability to obtain adequate and timely supplies. Such events include, among others, difficulties or problems associated with our suppliers’ business, the financial instability and labor problems of suppliers, merchandise quality and safety issues, natural or man-made disasters, inclement weather conditions, war, acts of terrorism and other political instability, economic conditions, transportation delays and shipment issues. Our suppliers may be forced to reduce their production, shut down their operations or file for bankruptcy. Our suppliers may consolidate, increasing their market power. The occurrence of one or more of these events could impact our ability to get products to our customers and/or wholesale partners, result in disruptions to our operations, increase our costs and decrease our profitability.

Global sourcing and foreign trade involve numerous factors and uncertainties beyond our control, including:

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Our sourcing operations may also be hurt by health concerns regarding the outbreak of viruses, widespread illness, infectious diseases, contagions and the occurrence of unforeseen epidemics (including the outbreak of the coronavirus and its potential impact on our financial results) in countries in which our merchandise is produced. Moreover, negative press or reports about internationally manufactured products may sway public opinion, and thus customer confidence, away from the products sold in our stores. Furthermore, changes in U.S. trade policies, including new restrictions, tariffs or other changes could lead to additional costs, delays in shipments, embargos and other uncertainties that could negatively impact our relationships with our international suppliers and materially adversely affect our business. These and other issues affecting our international suppliers or internationally manufactured merchandise could have a material adverse effect on our business, results of operations and financial condition.

In addition, some of our suppliers may not have the capacity to supply us with sufficient merchandise to keep pace with our growth plans, especially if we need significantly greater amounts of inventory. In such cases, our ability to pursue our growth strategy will depend in part upon our ability to develop new supplier relationships.

Failure of our suppliers or our licensees’ suppliers to use ethical business practices and comply with our code of conduct and laws and regulations could harm our business.

We work with contractors outside of the United States to manufacture our products, and we also have license agreements that permit unaffiliated parties to manufacture or contract for the manufacture of products using our intellectual property. We require the contractors that directly manufacture our products and our licensees that make products using our intellectual property (including, indirectly, their suppliers) to comply with a code of conduct and other environmental, health and safety standards for the benefit of workers. We also require these contractors to comply with applicable standards for product safety. We have partnered with Social Accountability International, a global non-governmental organization, and various third parties to develop a factory code of conduct and dual management systems and compliance audit programs based on local and international standards. Direct and licensee manufacturing partners are audited at least annually based on this standard, and the program is managed through the supply chain software, OSCA. However, we do not control our suppliers and manufacturers or their business, and notwithstanding their contractual obligations, from time to time contractors may not comply with such standards or applicable law or regulation or our licensees may fail to enforce such standards or applicable law or regulation on their contractors. Significant or continuing noncompliance with such standards and laws by one or more contractors could harm our reputation or result in a product recall and, as a result, could have an adverse effect on our sales and financial condition. In addition, we rely on our manufacturers’ and suppliers’ compliance reporting in order to comply with regulations applicable to our products. This is further complicated by the fact that expectations of ethical business practices continually evolve and may be substantially more demanding than applicable legal requirements. Ethical business practices are also driven in part by legal developments and by diverse groups active in publicizing and organizing public responses to perceived ethical shortcomings. Accordingly, we cannot predict how such regulations or expectations might develop in the future and cannot be certain that our guidelines or current practices would satisfy all parties who are active in monitoring our products or other business practices worldwide.

Negative publicity regarding production methods, alleged practices or workplace or related conditions of any of our suppliers, manufacturers or licensees could adversely affect our brand image and sales and force us to locate alternative suppliers, manufacturers or licenses, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions to our operations.

If we encounter problems with distribution, our or our customers’ ability to deliver our products to market could be adversely affected.

We rely on a limited number of distribution and fulfillment centers in the regions in which we operate. Substantially all of our inventory is shipped directly from our suppliers to our distribution center in New

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Hampshire and a network of fulfillment centers in the United States, Hong Kong and Japan that are managed by third-party vendors where the inventory is then processed, sorted and shipped to our stores, our customers, our wholesale partners or our distributors using third-party carriers. We depend in large part on the orderly operation of this receiving and distribution process, which depends, in turn, on adherence to shipping schedules and effective management of our distribution center and our vendors’ fulfillment centers. Any increase in transportation costs (including increases in fuel costs), increased shipping costs, issues with overseas shipments, supplier-side delays, reductions in the transportation capacity of carriers, labor strikes or shortages in the transportation industry, disruptions to the national and international transportation infrastructure and unexpected delivery interruptions or delays may increase the cost of, and adversely impact, our distribution process.

In addition, if we or our vendors change the transportation companies we or they use, we or they could face logistical difficulties that could adversely affect deliveries and we or they could incur costs and expend resources in connection with such change. We or our vendors also may not be able to obtain terms as favorable as those received from the third-party transportation providers we or they currently use, which could increase our or their costs. We also may not adequately anticipate changing demands on our distribution system, including the effect of any expansion we may need to implement in our distribution center or through our vendors’ fulfillment centers.

In addition, events beyond our control, such as disruptions in operations due to natural or man-made disasters, inclement weather conditions, accidents, system failures, power outages, political instability, physical or cyber break-ins, server failure, work stoppages, slowdowns or strikes by employees, acts of terrorism, the outbreak of viruses, widespread illness, infectious diseases, contagions and the occurrence of unforeseen epidemics (including the outbreak of the coronavirus and its potential impact on our financial results) and other unforeseen or catastrophic events, could damage our distribution center or our vendors’ fulfillment centers or render them inoperable, making it difficult or impossible for us or our vendors to process customer orders for an extended period of time. Such events may also result in delays in our or our vendors’ receipt of inventory and the delivery of merchandise between our customers, our stores and/or our partners and our distribution center and our vendors’ fulfillment centers. We or our vendors could also incur significantly higher costs and longer lead times associated with distributing inventory during the time it takes for us or our vendors to reopen or replace our distribution center or any of their fulfillment centers.

The inability to fulfill, or any delays in processing, customer orders through our distribution network or any quality issues could result in the loss of retail customers or wholesale partners or issuances of refunds or credits, and may also adversely affect our reputation. The success of our stores, our wholesale partners or our distributors depends on their timely receipt of products for sale and any repeated, intermittent or long-term disruption in, or failures of, the operations of our distribution center or our vendors’ fulfillment centers could result in lower sales and profitability, a loss of loyalty to our brand and excess inventory. The insurance we maintain for business interruption may not cover all risk, or be sufficient to cover all of our potential losses, and may not continue to be available to us on acceptable terms, if at all, and any insurance proceeds may not be paid to us in a timely manner.

We rely on third parties to provide us with services in connection with the administration of certain aspects of our business.

We have entered into agreements with third-party service providers, both domestically and internationally, to provide processing, information technology and administrative functions over a broad range of areas, including managing our supply chain and inventory, processing transactions in our stores, our financial accounting and reporting, compensating our employees and operating our digital commerce platform, and we may continue to do so in the future. These areas include digital commerce, information technology and distribution functions. Services provided by third parties could be interrupted as a result of many factors, including contract disputes, destruction of facilities, work stoppage or strike, or failure of essential equipment. Any failure by third parties to provide us with these services on a timely basis or within our service level

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expectations and performance standards could result in a disruption of our operations and could have a material adverse effect on our business, results of operations and financial condition. In addition, to the extent we are unable to maintain these arrangements, we would incur substantial costs in order to return these services in-house, including costs associated with hiring new employees, or to transition the services to other third parties.

We are subject to data security and privacy risks that could negatively impact our results of operations or reputation.

We collect, process, transmit and store personal, sensitive and confidential information, including our proprietary business information and that of consumers (including users of our sites) and our wholesale partners, distributors, employees, suppliers and business partners. The secure processing, maintenance and transmission of this information is critical to our operations. Consumers and our wholesale partners, distributors, employees, suppliers and business partners have a high expectation that we will adequately protect their information, including personal information, from cyber-attack or other security breaches, and may have claims against us if we are unable to do so. We may also have exposure to regulatory investigation and other compliance risks in the event of a cyber-attack or other security breach. Our wholesale partners, distributors and other business partners may have contractual rights of indemnification against us in the event that their customer or proprietary business information is released as a result of a breach of our information systems. In such an event, these business partners may also seek to terminate our contracts with them.

Our systems and those of our wholesale partners, distributors, third-party service providers and business partners may be vulnerable to security breaches, attacks by hackers, acts of vandalism, computer viruses, misplaced or lost data, human errors or other similar events. We have been subject to attempted cyber-attacks in the past and may continue to be subject to such attacks in the future. If unauthorized parties gain access to our networks or databases, or those of our wholesale partners, distributors, third-party service providers or business partners, they may be able to steal, publish, delete, use inappropriately or modify our private and sensitive third-party information, including credit card information and personal identification information. In addition, employees may intentionally or inadvertently cause data or security breaches that result in unauthorized release of personal or confidential information. Because the techniques used to circumvent security systems can be highly sophisticated, change frequently, are often not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address all possible techniques or implement adequate preventive measures for all situations. Any such breach, attack, virus or other event could result in costly investigations and litigation exceeding applicable insurance coverage or contractual rights available to us, government enforcement actions, civil or criminal penalties, fines, operational changes or other response measures, loss of consumer confidence in our security measures, and negative publicity that could adversely affect our brand, business, results of operations and financial condition. These losses may not be adequately covered by insurance or other contractual rights available to us.

In addition, we must comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States, Europe and elsewhere. The regulatory environment surrounding information security and privacy is demanding, with the frequent imposition of new and changing requirements across our business. Various federal, state and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection, information security and consumer protection. For example, California recently enacted the California Consumer Privacy Act, or the CCPA, which, among other things, requires new disclosures to California consumers, affords such consumers new abilities to opt out of certain sales of personal information and creates a new and potentially severe statutory damages framework for violations as it went into effect on January 1, 2020. The effects of the CCPA potentially are significant, however, and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. Penalties for violations of the CCPA will include civil penalties. The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us, consumers and our wholesale partners and distributors, and potentially exposing us to

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additional expense, adverse publicity and liability. As privacy and information security laws and regulations change, we may incur additional compliance costs.

In May 2018, the European Union’s new regulation governing data practices and privacy called the General Data Protection Regulation, or the GDPR, became effective. The law requires companies to meet more stringent requirements regarding the handling of personal data of individuals in the European Union than were required under predecessor requirements. The law also increases the penalties for non-compliance, which may result in monetary penalties of up to €20.0 million or 4% of a company’s worldwide annual revenue of the previous fiscal year, whichever is higher. The GDPR and other similar regulations require companies to give specific types of notice and in some cases seek consent from consumers and other data subjects before collecting or using their data for certain purposes, including some marketing activities. Outside of the European Union, many countries and territories have laws, regulations or other requirements relating to privacy, data protection, information security and consumer protection, and new countries and territories are adopting such legislation or other obligations with increasing frequency. Many of these laws may require consent from consumers for the use of data for various purposes, including marketing, which may reduce our ability to market our products. There is no harmonized approach to these laws and regulations globally. Consequently, we would increase our risk of non-compliance with applicable foreign data protection laws by expanding internationally. We may need to change and limit the way we use personal information in operating our business and may have difficulty maintaining a single operating model that is compliant.

Further, because we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data Security Standard, or the PCI Standard, issued by the Payment Card Industry Security Standards Council, with respect to payment card information. The PCI Standard contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing and transmission of cardholder data. Compliance with the PCI Standard and implementing related procedures, technology and information security measures requires significant resources and ongoing attention. Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology, such as those necessary to achieve compliance with the PCI Standard or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations. Any material interruptions or failures in our payment-related systems could have a material adverse effect on our business, results of operations and financial condition. If there are amendments to the PCI Standard, the cost of re-compliance could also be substantial and we may suffer loss of critical data and interruptions or delays in our operations as a result. If we are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could adversely affect our retail operations.

As a general matter, compliance with laws, regulations and any applicable rules or guidance from self-regulatory organizations relating to privacy, data protection, information security and consumer protection may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to acquire customers and otherwise adversely affect our business, results of operations and financial condition.

Any failure, inadequacy, interruption or breach of our information technology systems, whether owned by us or outsourced or managed by third parties, could harm our ability to effectively operate our business and could have a material adverse effect on our business, results of operations and financial condition.

We rely heavily on our information technology systems, including those maintained by us and those maintained and provided by third parties (for example, “software-as-a-service” and cloud solutions), for many functions across our operations, including managing our supply chain and inventory, processing transactions in our stores, our financial accounting and reporting, compensating our employees and operating our digital commerce platform. Our ability to effectively manage our business and coordinate the sourcing, distribution and sale of our products depends significantly on the reliability and capacity of these systems. Such systems are

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subject to damage or interruption from power outages or damages, telecommunications problems, data corruption, software errors, theft, design defects, network failures, security breaches, acts of war or terrorist attacks, fire, flood and natural disasters. Our servers or those maintained by third-party providers could be affected by physical or electronic break-ins, and computer viruses or similar disruptions may occur. A system outage may also cause the loss of important data. Our or our third-party providers’ existing safety systems, data backup, access protection, user management and information technology emergency planning may not be sufficient to prevent data loss or long-term network outages.

In addition, we may have to upgrade our existing information technology systems from time to time in order for such systems to withstand the increasing needs of our expanding business. We rely on certain hardware, telecommunications and software vendors to maintain and periodically upgrade many of these systems so that we can continue to support our business. Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations. We also depend on our information technology staff. If we cannot meet our staffing needs in this area, we may not be able to fulfill our technology initiatives while continuing to provide maintenance on existing systems.

We could be required to make significant capital expenditures to remediate any such failure, malfunction or breach with our information technology systems. Further, additional investment needed to upgrade and expand our information technology infrastructure will require significant investment of additional resources and capital, which may not always be available or available on favorable terms. Any material disruption or slowdown of our systems or those of our third-party providers, including those caused by our or their failure to successfully upgrade our or their systems, and our or their inability to convert to alternate systems in an efficient and timely manner could have a material adverse effect on our business, results of operations and financial condition.

If we fail to retain our existing senior management team or attract qualified new talent, such failure could have a material adverse effect on our business, financial condition and results of operations.

Our business requires disciplined execution at all levels of our organization. This execution requires an experienced and talented management team. If we were to lose the benefit of the experience, efforts and abilities of key executive personnel, it could have a material adverse effect on our business, results of operations and financial condition. Our success also depends on our ability to recruit, retain and motivate a sufficient number of qualified team members for our Innovation Center, qualified retail personnel and qualified technical and support roles for procurement, distribution, digital commerce and back office functions, both to maintain our current business and to execute our strategic initiatives. Competition for skilled and experienced management and qualified employees is intense and subject to high turnover, and requires us to pay higher wages to attract a sufficient number of suitable employees. We may not be successful in finding, attracting and retaining new qualified talent required to grow and operate our business profitably. In addition, shifts in U.S. immigration policy could negatively impact our ability to attract, hire and retain highly skilled employees who are from outside the United States.

Factors such as wage rate increases, inflation, cost increases, increases in raw material prices and energy prices could have a material adverse effect on our business, results of operations and financial condition.

Increases in compensation and other expenses for our employees may adversely affect our profitability. Wage and hour regulations, such as regulations issued in 2016 by the U.S. Department of Labor relating to minimum wages and overtime pay, can exacerbate this risk. Certain states have recently adopted legislation increasing minimum wages. Other future cost increases, such as increases in the cost of merchandise, shipping rates, raw material prices, freight costs and store occupancy costs, may also reduce our profitability. These cost increases may be the result of inflationary pressures that could further reduce our sales or profitability. Increases in other operating costs, including changes in energy prices and lease and utility costs, may increase our cost of sales or selling, general and administrative expense. Competitive pressures in the retail industry may inhibit our

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ability to reflect these increased costs in the prices of our products, in which case such increased costs could have a material adverse effect on our business, results of operations and financial condition.

Our profitability and cash flows may be negatively affected if we are not successful in managing our inventory.

Efficient inventory management is a key component of our success and profitability. To be successful, we must maintain sufficient inventory levels to meet our customers’ demands without allowing those levels to increase to such an extent that the costs to distribution center and stores to hold the goods unduly impacts our financial results. If we do not accurately predict customer trends or spending levels in general or at particular stores or if we inappropriately price products, we may have to take unanticipated markdowns and discounts to dispose of obsolete, aged or excess inventory or record potential write-downs relating to the value of obsolete, aged or excess inventory. Conversely, if we underestimate future demand for a particular product or do not respond quickly enough to replenish our best-performing products, we may have a shortfall in inventory of such products, likely leading to unfulfilled orders, reduced revenue and customer dissatisfaction.

Maintaining adequate inventory requires significant attention and monitoring of market trends, local markets, developments with suppliers and our distribution network, and it is not certain that we will be effective in our inventory management. We are subject to the risk of inventory loss or theft and we may experience higher rates of inventory shrinkage or incur increased security costs to combat inventory theft. In addition, any casualty or disruption to our distribution center, third-party fulfillment centers or our stores may damage or destroy our inventory located there. As we expand our operations, it may be more difficult to effectively manage our inventory. If we are not successful in managing our inventory balances, it could have a material adverse effect on our business, results of operations and financial condition.

Merchandise returns could harm our business.

We allow our customers to return products, subject to our return policy. From time to time our products are damaged in transit, which can increase return rates and harm our brand. If the rate of merchandise returns increases significantly or if merchandise return economics become less efficient, our business, results of operations and financial condition could be harmed. Further, we modify our policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns.

Our results of operations and inventory levels fluctuate on a quarterly basis.

We experience quarterly fluctuations in our financial performance, including in our North America DTC comparable sales, as a result of a variety of factors, including the timing of the holiday shopping season (in particular, around Thanksgiving), the timing of store openings or closings and the sales generated by new stores or lost by closed stores, merchandise mix, the timing of new advertising and product introductions and the timing and level of inventory markdowns. In addition, adverse events, such as higher unemployment, deteriorating economic conditions, public transportation disruptions or unanticipated adverse weather or travel conditions can deter consumers from shopping. Unseasonal weather could also negatively impact sales of certain of our seasonal products, such as boots and sandals. As a result, historical period-to-period comparisons of our results of operations are not necessarily indicative of future period-to-period results. See “Business—Impact of Variability of Calendar on Comparability of Our Quarterly Results.”

In addition, in order to prepare for our peak shopping quarters, we must increase the staffing at our stores and order and keep in stock more merchandise than we carry during other parts of the year. This staffing increase and inventory build-up may require us to expend cash faster than is generated by our operations during this period. Any unanticipated decrease in demand for our products during such period could require us to sell excess inventory at a substantial markdown, which could have a material adverse effect on our business, results of operations and financial condition.

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We are subject to risks associated with leasing substantial amounts of space, including future increases in occupancy costs.

We lease all of the Company-operated store locations, our corporate headquarters and our distribution center. As a result, we are susceptible to changes in the property rental market and increases in our occupancy costs.

The success of our business depends, in part, on our ability to identify suitable premises for our stores and to negotiate acceptable lease terms. Our ability to effectively renew our existing store leases or obtain store leases to open new stores depends on the availability of store premises that meet our criteria for traffic, square footage, lease economics, demographics and other factors. We may not be able to renew or extend our existing store leases on acceptable terms, or at all, and may have to abandon desirable locations or renew leases on unfavorable terms. In addition, tenants at shopping centers in which we are located or have executed leases, or to which our locations are near, may fail to open or may cease operations. Decreases in total tenant occupancy in shopping centers in which we are located, or to which our locations are near, may affect traffic at our stores. All of these factors could have a material adverse impact on our operations.

Most leases for our stores provide for a minimum rent and typically include escalating rent increases over time. In certain circumstances, we pay a percentage rent based upon sales after certain minimum thresholds are achieved. The leases generally require us to pay insurance, utilities, real estate taxes and repair and maintenance expenses. Certain leases also provide that we cannot close or “go dark” even if we continue to pay rent. Our substantial lease obligations could have significant negative consequences, including:

We depend on cash flows from operations to pay our lease expenses and to fulfill our other cash needs. If our business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise available to us from borrowings or other sources, we may not be able to service our lease expenses, grow our business, respond to competitive changes or fund our other liquidity and capital needs, which could harm our business.

Further, the substantial majority of our leased sites are both currently and in the future expected to be subject to long-term, non-cancellable leases. If an existing or future store is not profitable and we decide to close it, we may nonetheless be obligated to perform our obligations under the applicable lease, including, among other things, paying the base rent and other charges for the balance of the lease term. Even if a lease has an early cancellation clause, we may not satisfy the contractual requirements for early cancellation under that lease.

As we expand our store base, particularly in certain markets that are more expensive, our lease expense and our cash outlays for rent under lease agreements may increase. Our inability to enter into new leases or renew existing leases on terms acceptable to us, or be released from our obligations under leases for stores that we close, could materially and adversely affect our business, results of operations and financial condition.

Changes in tax laws, adoption of new tax laws, unfavorable resolution of tax contingencies or exposure to additional tax liabilities could have a material impact on our results of operations or financial condition.

We are subject to income taxes and non-income based taxes in both the United States and various foreign jurisdictions. We are also subject to on-going tax audits in various jurisdictions. Tax authorities may disagree

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with certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision and have established contingency reserves for material, known tax exposures. However, the calculation of such tax exposures involves the application of complex tax laws and regulations in many jurisdictions, as well as interpretations as to the legality under European Union state aid rules of tax advantages granted in certain jurisdictions. Therefore, there can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues raised by tax authorities will be resolved at a financial cost that does not exceed our related reserves, and the actual outcomes of these disputes and other tax audits could have a material impact on our results of operations or financial condition.

Changes in tax laws and regulations, or their interpretation and application, in the jurisdictions where we are subject to tax could materially impact our effective tax rate. The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, included a number of significant changes to previous U.S. tax laws that impact us, including a reduction in the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, among other changes. The Tax Cuts and Jobs Act also transitions U.S. international taxation from a worldwide system to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings, which has the effect of subjecting certain earnings of our foreign subsidiaries to U.S. taxation.

The tax laws in the United States and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could materially adversely affect our results of operations or financial condition.

We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our customers would have to pay for our products and adversely affect our results of operations.

On June 21, 2018, the U.S. Supreme Court held in South Dakota v. Wayfair, Inc. that states could impose sales tax collection obligations on out-of-state retailers even if those retailers lack any physical presence within the states imposing sales taxes. An increasing number of states, both before and after the Supreme Court’s ruling, have considered or adopted laws that attempt to impose sales tax collection obligations on out-of-state retailers. The Supreme Court’s Wayfair decision has removed a significant impediment to the enactment of these laws, and it is possible that states may seek to tax out-of-state retailers, including for prior tax years. Although we believe that we currently collect sales taxes in all states that have adopted laws imposing sales tax collection obligations on out-of-state retailers since Wayfair was decided, a successful assertion by one or more states requiring us to collect sales taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some sales taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest. The imposition by state governments of sales tax collection obligations on out-of-state retailers in jurisdictions where we do not currently collect sales taxes, whether for prior years or prospectively, could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors and decrease our future sales, which could have a material adverse impact on our business, results of operations and financial condition.

Adverse litigation judgments or settlements resulting from legal proceedings relating to our business operations could materially adversely affect our business, results of operations and financial condition.

From time to time, we are subject to allegations, and may be party to legal claims and regulatory proceedings, relating to our business operations. Such allegations, claims and proceedings may be brought by third parties, including consumers, customers, partners, employees, governmental or regulatory bodies or competitors, and may include class actions. Defending against such claims and proceedings is costly and time consuming and may divert management’s attention and personnel resources from our normal business operations, and the outcome of many of these claims and proceedings cannot be predicted. If any of these claims or proceedings were to be determined adversely to us, a judgment, fine or settlement involving a payment of a material sum of money were to occur or injunctive relief were issued against us, our business, results of operations and financial condition could be materially adversely affected.

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Our operations are subject to environmental and workplace safety requirements, and costs or claims related to these requirements or to contamination could adversely affect us.

Our operations are subject to various federal, state and local requirements relating to the protection of the environment, including those governing the discharge of pollutants into the air, soil and water, the management and disposal of solid and hazardous materials and wastes, employee exposure to hazards in the workplace and the investigation and remediation of contamination resulting from releases of hazardous materials. If we fail to comply with such legal requirements we could be subject to enforcement actions, fines and liability. We use small quantities of hazardous substances in our operations. Our workers may also be subject to workplace hazards associated with our distribution operations. In addition, although we no longer manufacture shoes, we at one time operated several former manufacturing facilities. We may incur investigation, remediation or other costs related to releases of hazardous materials or other environmental conditions at locations where wastes from our facilities have been treated or disposed of, as well as at our currently or formerly owned or operated properties, regardless of whether we caused or contributed to such conditions, or those conditions were caused by former owners or operators or other third parties.

Goodwill and intangible assets, net represent a significant portion of our total assets, and any impairment of these assets could materially adversely affect our results of operations and financial condition.

Goodwill and intangible assets, net accounted for 52.9% and 40.8% of our total assets as of June 1, 2019 and November 30, 2019, respectively. We monitor the recoverability of our indefinite-lived intangible assets, which are our trademarks and tradenames, and evaluate goodwill and indefinite-lived intangible assets annually to determine if impairment has occurred. We also review the carrying value of our goodwill and intangible assets, both indefinite- and definite-lived, for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. Such indicators are based on market conditions and the operational performance of our business. If the testing performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the intangible assets or goodwill and the fair value of the intangible assets and the implied fair value of the goodwill, respectively, in the period the determination is made. The testing of goodwill and intangible assets for impairment requires us to make estimates that are subject to significant assumptions about our future sales, profitability, cash flow, fair value of assets and liabilities and weighted average cost of capital, as well as other assumptions. Changes in these estimates, or changes in actual performance compared with these estimates, may affect the fair value of intangible assets or goodwill, which may result in an impairment charge.

We may recognize impairment charges in the future based on such assumptions. We cannot accurately predict the amount or timing of any impairment of assets. If we determine that a significant impairment has occurred, we will be required to write off the impaired portion of intangible assets and goodwill. If a significant amount of our goodwill and intangible assets were deemed to be impaired, our business, results of operations and financial condition could be materially adversely affected.

Risks Related to Our Indebtedness

Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations.

We have a significant amount of indebtedness. As of November 30, 2019, we had $277.4 million of indebtedness outstanding, all of which was secured indebtedness, and an additional $115.0 million of availability under the ABL Credit Facility, which was undrawn.

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Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. Our substantial indebtedness could have other important consequences to us, including:

In addition, the credit agreements governing the Term Loan Facility and ABL Credit Facility contain, and the agreements governing future indebtedness may contain, restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default that, if not cured or waived, could result in the acceleration of all of our indebtedness.

We may be able to incur significant additional indebtedness in the future. Although the credit agreements governing the Term Loan Facility and ABL Credit Facility contain restrictions on the incurrence of additional indebtedness by us, such restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. Also, these restrictions do not prohibit us from incurring obligations that do not constitute “Indebtedness” as defined therein. To the extent that we incur additional indebtedness or such other obligations, the risk associated with our substantial indebtedness described above will increase.

We will require a significant amount of cash to service our debt, and our ability to generate cash depends on many factors beyond our control. Any failure to meet our debt service obligations could materially adversely affect our business, results of operations and financial condition.

Our ability to make payments on and to refinance our indebtedness and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operations, or if future borrowings are not available to us in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness on or before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on our operations. In addition, we may not be able to effect any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could

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be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments, including the credit agreements governing the Term Loan Facility and ABL Credit Facility, may limit or prevent us from taking any of these actions. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on commercially reasonable terms or at all. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, results of operations and financial condition, as well as on our ability to satisfy our obligations in respect of the Term Loan Facility and ABL Credit Facility.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under the Term Loan Facility and ABL Credit Facility are at variable rates of interest and expose us to interest rate risk. If interest rates were to increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. We have entered into, and may enter into in the future, interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all or any of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

LIBOR and other interest rates that are indices deemed to be “benchmarks” are the subject of recent and ongoing national, international and other regulatory guidance and proposals for reform. Some of these reforms are already effective, while others are still to be implemented. These reforms may cause such benchmarks to perform differently than in the past, or to disappear entirely, or have other consequences that cannot be predicted. Any such consequence could have a material adverse effect on our existing facilities, our interest rate swap agreement or our future debt linked to such a “benchmark” and our ability to service debt that bears interest at floating rates of interest.

Our debt instruments restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

The credit agreements governing the Term Loan Facility and ABL Credit Facility impose significant operating and financial restrictions and limit our ability to:

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As a result of these covenants and restrictions, we are and will be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. In addition, we are required to maintain specified financial ratios and satisfy other financial condition tests. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot guarantee that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to cure such non-compliance, obtain waivers from the lenders and/or amend the covenants.

Our failure to comply with the restrictive covenants described above, as well as others contained in our future debt instruments from time to time, could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date.

Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially adversely affect our business, results of operations and financial condition.

If there were an event of default under any of the agreements relating to our outstanding debt, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. Our assets or cash flow may not be sufficient to fully repay borrowing under our outstanding debt instruments if accelerated upon an event of default. Further, if we are unable to repay, refinance or restructure our secured debt, the holders of such debt could proceed against the collateral securing such debt. In addition, any event of default or declaration of acceleration under one debt instrument could result in an event of default under one or more of our other debt instruments. As a result, any default by us on our debt could have a materially adverse effect on our business, results of operations and financial condition.

Risks Related to this Offering and Ownership of Our Common Stock

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” among other exemptions:

We may remain an “emerging growth company” until the fiscal year-end following the fifth anniversary of the completion of this initial public offering, though we may cease to be an “emerging growth company” earlier under certain circumstances, including (1) if our gross revenue exceeds $1.07 billion in any fiscal year, (2) if we become a large accelerated filer, with at least $700.0 million of equity securities held by non-affiliates, or (3) if we issue more than $1.0 billion in non-convertible notes in any three-year period.

We cannot predict if investors may find our common stock less attractive if we rely on the exemptions and relief granted by the JOBS Act. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may decline and/or become more volatile.

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We will be a “controlled company” within the meaning of the rules of NASDAQ and the rules of the SEC and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of other companies that are subject to such requirements.

After completion of this offering, our Sponsor will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of NASDAQ. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that:

Following this offering, we intend to utilize these exemptions. As a result, we may not have a majority of independent directors, our compensation committee and nominating and governance committee may not consist entirely of independent directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of NASDAQ.

Our Sponsor controls us and its interests may conflict with yours in the future.

Immediately following this offering, our Sponsor will beneficially own     % of our common stock, or     % if the underwriters exercise in full their option to purchase additional shares. Our Sponsor will be able to control the election and removal of our directors and thereby determine our corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendment of our certificate of incorporation or bylaws and other significant corporate transactions, for so long as our Sponsor and its affiliates retain significant ownership of us. This concentration of our ownership may delay or deter possible changes in control of the Company, which may reduce the value of an investment in our common stock. So long as our Sponsor continues to own a significant amount of our combined voting power, even if such amount is less than 50%, our Sponsor will continue to be able to strongly influence or effectively control our decisions and, so long as our Sponsor and its affiliates and certain of their transferees collectively own at least 5% of all outstanding shares of our stock entitled to vote generally in the election of directors, our Sponsor will be able to appoint individuals to our board of directors under the stockholders agreement to be entered into in connection with this offering. In addition, the stockholders agreement will grant to our Sponsor and its affiliates and certain of their transferees certain governance rights for as long as our Sponsor and its affiliates and certain of their transferees maintain ownership of at least 25% of our outstanding common stock, including rights of approval over certain corporate and other transactions and the appointment of our chief executive officer. See “Certain Relationships and Related Party Transactions—Stockholders Agreement.” The interests of our Sponsor may not coincide with the interests of other holders of our common stock.

In the ordinary course of their business activities, our Sponsor and its affiliates may engage in activities where their interests conflict with our interests or those of our stockholders. Our certificate of incorporation will provide that our Sponsor, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates will not have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Our Sponsor also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. In addition, our Sponsor may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you.

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In addition, our Sponsor and its affiliates will be able to determine the outcome of all matters requiring stockholder approval and will be able to cause or prevent a change of control of the Company or a change in the composition of our board of directors and could preclude any acquisition of the Company. This concentration of voting control could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of the Company and ultimately might affect the market price of our common stock.

We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a public company, and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.

As a public company, we will incur significant legal, regulatory, finance, accounting, investor relations and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and related rules implemented by the SEC and NASDAQ. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements, diverting the attention of management away from revenue-producing activities. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory actions and potentially civil litigation.

Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price. We currently have a material weakness in our internal control over financial reporting.

As a privately held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act, or Section 404.

As a public company, we will have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our operating results. In addition, we will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report following the completion of this offering. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. If we are no longer an “emerging

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growth company,” our auditors will be required to issue an attestation report on the effectiveness of our internal controls on an annual basis.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent registered public accounting firm in connection with the issuance of their attestation report. Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected on a timely basis. Any material weaknesses could result in a material misstatement of our annual or quarterly consolidated financial statements or disclosures that may not be prevented or detected. The existence of any material weakness would require management to devote significant time and incur significant expense to remediate any such material weakness and management may not be able to remediate any such material weakness in a timely manner.

We identified a material weakness in our internal control over financial reporting related to our Japan subsidiary, as we did not design and maintain effective controls over the review of journal entries and account reconciliations. Specifically, we did not design and maintain effective controls to ensure that journal entries and account reconciliations were (i) properly prepared with sufficient supporting documentation or (ii) reviewed and approved to ensure accuracy and completeness. This material weakness did not result in a misstatement to our financial statements. The material weakness could result in a misstatement that would result in a material misstatement of our financial statements that would not be prevented or detected and, accordingly, we determined that these control deficiencies constitute a material weakness.

We are implementing process and control improvements to address this material weakness. If we are unable to remediate this material weakness in a timely manner, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404, or our independent registered public accounting firm may not issue an unqualified opinion (to the extent it is required to issue a report). If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report (to the extent it is required to issue a report), investors could lose confidence in our reported financial information, which could have a material adverse effect on our business or the trading price of our common stock.

There may not be an active, liquid trading market for shares of our common stock, which may cause shares of our common stock to trade at a discount from the initial offering price and make it difficult to sell the shares of common stock you purchase.

Prior to this offering, there has not been a public trading market for shares of our common stock. We cannot predict the extent to which investor interest in us will lead to the development of a trading market or how active and liquid that market may become. If an active and liquid trading market does not develop or continue, you may have difficulty selling your shares of our common stock at an attractive price or at all. The initial public offering price per share of common stock will be determined by agreement among us, the selling stockholders and the representatives of the underwriters, and may not be indicative of the price at which shares of our common stock will trade in the public market after this offering. The market price of our common stock may decline below the initial offering price and you may not be able to sell your shares of our common stock at or above the price you paid in this offering, or at all.

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Our stock price may change significantly following this offering, you may not be able to resell shares of our common stock at or above the price you paid or at all and you could lose all or part of your investment as a result.

Even if a trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations. You may not be able to resell your shares at or above the initial public offering price due to a number of factors, such as those listed elsewhere in this “Risk Factors” section and the following:

Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.

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In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.

After this offering we will have approximately                  shares of common stock authorized but unissued. Our amended and restated certificate of incorporation to become effective immediately prior to the consummation of this offering will authorize us to issue these shares of common stock and options relating to common stock for the consideration, and on the terms and conditions, established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. We have reserved shares for issuance under our new Omnibus Incentive Plan. See “Management—Executive Compensation—Compensation Arrangements to be Adopted in connection with this Offering.” Any common stock that we issue, including under our new Omnibus Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase common stock in this offering. In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under the Term Loan Facility and ABL Credit Facility and other indebtedness we may incur, and such other factors as our board of directors may deem relevant. See “Dividend Policy.”

As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than your purchase price.

Cole Haan, Inc. is a holding company and depends on its subsidiaries for cash to fund its operations and expenses, including future dividend payments, if any.

Our operations are conducted through our wholly owned subsidiaries and our ability to generate cash to meet our debt service obligations or to make future dividend payments, if any, is highly dependent on the earnings of, and the receipt of funds from, our subsidiaries via dividends or intercompany loans. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future; however, to the extent that we determine in the future to pay dividends on our common stock, the agreements governing our indebtedness may restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market following this offering could cause the market price for our common stock to decline.

The sale of substantial amounts of shares of our common stock in the public market, or the perception that such sales could occur, including sales by our Sponsor, could harm the prevailing market price of shares of our

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common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon completion of this offering we will have a total of                  shares of our common stock outstanding. Of the outstanding shares, the                  shares sold in this offering (or                  shares if the underwriters exercise their option to purchase additional shares) will be freely tradable without restriction or further registration under the Securities Act, except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, or Rule 144, including our directors, executive officers and other affiliates (including our Sponsor), may be sold only in compliance with the limitations described in “Shares Eligible for Future Sale.”

The remaining outstanding                  shares of common stock held by our existing stockholders after this offering will be subject to certain restrictions on resale. We, our executive officers, our directors and certain of our significant stockholders, including the selling stockholders, will sign lock-up agreements with the underwriters that will, subject to certain customary exceptions, restrict the sale of the shares of our common stock and certain other securities held by them for 180 days following the date of this prospectus. BofA Securities, Inc. and Morgan Stanley & Co. LLC may, in their sole discretion and at any time without notice, release all or any portion of the shares or securities subject to any such lock-up agreements. See “Underwriting” for a description of these lock-up agreements.

Upon the expiration of the lock-up agreements described above, all of such                  shares (or                  shares if the underwriters exercise in full their option to purchase additional shares) will be eligible for resale in a public market, subject, in the case of shares held by our affiliates, to volume, manner of sale and other limitations under Rule 144. We expect that our Sponsor will be considered an affiliate upon the expiration of the lock-up period based on its expected share ownership (consisting of                  shares), as well as its board nomination rights. Certain other of our stockholders, including our directors and executive officers, may also be considered affiliates at that time. The stockholders agreement will impose significant restrictions on transfers of shares of our common stock held by management and director stockholders. See “Certain Relationships and Related Party Transactions—Stockholders Agreement.”

In addition, pursuant to the stockholders agreement, our Sponsor has the right, subject to certain conditions, to require us to register the sale of their shares of our common stock under the Securities Act. See “Certain Relationships and Related Party Transactions—Stockholders Agreement.” By exercising its registration rights and selling a large number of shares, our Sponsor could cause the prevailing market price of our common stock to decline. Certain of our other stockholders have “piggyback” registration rights with respect to future registered offerings of our common stock. Following completion of this offering, the shares covered by registration rights would represent approximately     % of our total common stock outstanding (or     % if the underwriters exercise in full their option to purchase additional shares). Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the applicable registration statement. See “Shares Eligible for Future Sale.”

We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock or securities convertible into or exchangeable for shares of our common stock issued pursuant to our new Omnibus Incentive Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. We expect that the initial registration statement on Form S-8 will cover                  shares of our common stock.

As restrictions on resale end, or if existing stockholders exercise their registration rights, the market price of our shares of common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

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If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. If one or more of the analysts who cover us downgrade our stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our common stock could decline. If one or more of these analysts ceases coverage of the Company or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.

These provisions will provide for, among other things:

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. See “Description of Capital Stock.”

Our board of directors will be authorized to issue and designate shares of our preferred stock in additional series without stockholder approval.

Our amended and restated certificate of incorporation will authorize our board of directors, without the approval of our stockholders, to issue                  shares of our preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions of our amended and restated certificate of incorporation, as shares of preferred stock in series, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The powers, preferences and rights of these additional series of preferred stock would be senior to our common stock, which may reduce the value of our common stock.

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Our amended and restated certificate of incorporation will provide, subject to limited exceptions, that state and federal courts (as appropriate) located within the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our amended and restated certificate of incorporation will provide, subject to limited exceptions, that unless we consent to the selection of an alternative forum, the state or federal courts (as appropriate) located within the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee or stockholder of ours to the Company or our stockholders, creditors or other constituents, (iii) action asserting a claim against the Company or any director or officer of the Company arising pursuant to any provision of the Delaware General Corporation Law, or the DGCL, or our amended and restated certificate of incorporation or our amended and restated bylaws, or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, (iv) action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine or (v) action against us or any of our directors or officers involving a claim or defense arising pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the Securities Act. The enforceability of similar forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be unenforceable in whole or in part. Our exclusive forum provision will not relieve the Company of its duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

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FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements are included throughout this prospectus, including in the sections entitled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this prospectus.

The forward-looking statements contained in this prospectus are based on management’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. We believe that these factors include but are not limited to those described under “Risk Factors” and the following:

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These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.

Any forward-looking statement made by us in this prospectus speaks only as of the date of this prospectus and is expressly qualified in its entirety by the cautionary statements included in this prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws. You should not place undue reliance on our forward-looking statements.

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USE OF PROCEEDS

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders in this offering, including from any exercise by the underwriters of their option to purchase additional shares from the selling stockholders. The selling stockholders will receive all of the net proceeds and bear the underwriting discount, if any, attributable to their sale of our common stock. We will pay certain expenses associated with this offering. See “Principal and Selling Stockholders.”

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DIVIDEND POLICY

We currently expect to retain all future earnings for use in the operation and expansion of our business and have no current plans to pay dividends on our common stock. The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under the Term Loan Facility and ABL Credit Facility and other indebtedness we may incur, and such other factors as our board of directors may deem relevant. If we elect to pay such dividends in the future, we may reduce or discontinue entirely the payment of such dividends at any time.

Because we are a holding company, our ability to pay dividends depends on our receipt of cash from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. Certain of our subsidiaries are subject to the Term Loan Facility and ABL Credit Facility, which contain covenants that limit such subsidiaries’ ability to make restricted payments, including dividends, and take on additional indebtedness. See “Description of Certain Indebtedness” for a description of the restrictions on our ability to pay dividends.

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CAPITALIZATION

The following table sets forth our cash and our capitalization as of November 30, 2019.

You should read this table in conjunction with the information contained in “Use of Proceeds,” “Selected Historical Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Certain Indebtedness” as well as our audited consolidated financial statements and related notes thereto and our unaudited condensed consolidated financial statements and related notes thereto, each included elsewhere in this prospectus.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

Set forth below is our selected historical consolidated financial and other data as of the dates and for the periods indicated. We have derived the selected historical consolidated statements of operations data and consolidated statements of cash flows data for the fiscal years ended June 2, 2018 and June 1, 2019 and the selected historical consolidated balance sheet data as of June 2, 2018 and June 1, 2019 from our audited historical consolidated financial statements included elsewhere in this prospectus. Our historical audited results are not necessarily indicative of the results that should be expected in any future period.

We have derived the selected historical condensed consolidated statements of operations data and condensed consolidated statements of cash flows data for the 26-week periods ended December 1, 2018 and November 30, 2019 and the selected historical condensed consolidated balance sheet data as of November 30, 2019 from our unaudited historical condensed consolidated financial statements included elsewhere in this prospectus. With the exception of the adoption of Topic 842, which we adopted on a modified retrospective basis on June 2, 2019, the first day of fiscal year 2020, our unaudited condensed consolidated financial statements were prepared on a basis consistent with the audited consolidated financial statements and, have included all adjustments, consisting only of normal recurring adjustments that, in our opinion, are necessary to present fairly the financial information set forth in those statements. The results for any interim period are not necessarily indicative of the results that may be expected for the full year and our historical unaudited results are not necessarily indicative of the results that should be expected in any future period.

You should read the following selected historical consolidated financial and other data below together with the information under “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements and related notes thereto and our unaudited condensed consolidated financial statements and related notes thereto, each included elsewhere in this prospectus.

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We present Adjusted EBITDA and Adjusted EBITDA margin because we believe they are useful indicators of our operating performance. Our management uses Adjusted EBITDA and Adjusted EBITDA margin principally as measures of our operating performance and believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We also believe Adjusted EBITDA and Adjusted EBITDA margin are useful to our management and investors as a measure of comparative operating performance from period to period.

Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and should not be considered as alternatives to net income as a measure of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted EBITDA and Adjusted EBITDA margin as a supplement.

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Our Adjusted EBITDA measures have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:

Because of these limitations, Adjusted EBITDA and Adjusted EBITDA margin should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness.

The following table provides a reconciliation of net income to Adjusted EBITDA for the periods presented:

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Summary—Summary Historical Consolidated Financial and Other Data,” “Selected Historical Consolidated Financial and Other Data” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus. The following discussion contains forward-looking statements that reflect our plans, estimates and assumptions. Our actual results could differ materially from those discussed in any forward-looking statements. Factors that could cause such differences are discussed in the sections of this prospectus titled “Risk Factors” and “Forward-Looking Statements.”

We conduct substantially all of our activities through our direct wholly owned subsidiary, Cole Haan LLC, and its subsidiaries. We operate on a 52 or 53-week fiscal year that ends on the Saturday closest to May 31 of that year. In a 52-week fiscal year, each quarter contains 13 weeks of operations, and in the years with 53 weeks, the fourth quarter contains 14 weeks of operations. References to fiscal year 2018 and fiscal year 2019 relate to our fiscal years ended June 2, 2018 and June 1, 2019, respectively, each a 52-week period.

Overview

Cole Haan is a global lifestyle brand serving always-connected, active professionals with innovative footwear and lifestyle accessories. We market footwear and lifestyle accessories across the Dress, Casual, Outdoor and Sport use occasions. Over the past several years, our footwear offering has broadened from a focus on the Dress use occasion to include a broader selection of Casual, Outdoor and Sport use occasions, which comprised 53% of our fiscal year 2019 footwear revenue. We have built a global, multi-channel distribution network across 64 countries that includes our global digital flagship site, colehaan.com, 368 stores and over 450 diverse global wholesale accounts.

Since our 2013 Acquisition, we have completed over $100.0 million in transformational investments in technology, digital infrastructure, product innovation and other areas, which we believe have positioned us for growth. We plan to grow our business by expanding our product offerings to earn more share of our customers’ closets, continuing to engage in customer acquisition and retention efforts that drive long-term customer relationships, and continuing to grow our North America DTC, North America Wholesale and International businesses.

Our Segments

Our business is operated through two geographic regions that comprise our two reportable segments. We measure each operating segment’s performance based on revenue and Segment Adjusted EBITDA.

Our North America segment comprises our DTC business, which includes our digital flagship site, colehaan.com, and 112 stores in the United States and Canada, and wholesale distribution in the United States to a diverse account base spanning digital pureplay, specialty retail, premium department store, sporting goods and family footwear accounts. Over 96% of our North America segment revenue was generated from the United States in each of fiscal year 2018 and fiscal year 2019 and the 26-week period ended December 1, 2018 and the 26-week period ended November 30, 2019. In Canada, in addition to our DTC sales, we generate revenue by selling our products to a distributor who then sells to regional wholesale accounts. In addition, we license to third parties the design, development and distribution of certain product categories, including small leather goods, eyewear, outerwear, hosiery, suiting and cold weather goods. Our North America segment represented 84.3% and 85.7% of our revenue for fiscal year 2018 and fiscal year 2019, respectively, and 86.7% and 86.1% of our revenue for the 26-week period ended December 1, 2018 and the 26-week period ended November 30, 2019, respectively.

Our International segment includes our wholly owned Japanese subsidiary and partnerships with leading regional distributors and wholesalers. In Japan, where we have operated for nearly 25 years, our footprint is

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primarily DTC, consisting of 80 stores and our localized digital commerce site, colehaan.co.jp. Outside of Japan, the remainder of our International sales occur in over 60 countries. In these markets, we employ a capital-efficient model where our 37 regional distributors fund the cost to build and operate 176 Cole Haan designed and branded stores. Typically, we retain digital commerce rights, while our distributors have local distribution rights. We have also successfully expanded our wholesale business in countries where we operate directly, including the United Kingdom and Japan. Our International segment represented 15.7% and 14.3% of our revenue for fiscal year 2018 and fiscal year 2019, respectively, and 13.3% and 13.9% of our revenue for the 26-week period ended December 1, 2018 and the 26-week period ended November 30, 2019, respectively.

The following table sets forth, for the periods indicated, our revenue and Segment Adjusted EBITDA:

Factors Affecting Our Business

We believe that our business and growth depend on a number of factors that present significant opportunities for us and may pose risks and challenges, including those discussed below and under “Risk Factors.”

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We are also carefully monitoring the ongoing coronavirus health crisis in Greater China, which developed ahead of a peak traveling and shopping season around the Lunar New Year on January 25, 2020. The outbreak of the coronavirus in Greater China could adversely affect our business, results of operations and financial condition. The coronavirus outbreak may materially impact our sourcing and manufacturing operations as a portion of our products are manufactured in China and materials for our products are sourced in China by our manufacturers within Greater China and in other affected regions. Travel within China and into other countries may be restricted, which may impact our manufacturers’ ability to obtain necessary materials and inhibit travel of our and our manufacturers’ and material suppliers’ employees, which may in turn reduce our work force and that of our manufacturers and material suppliers. As a result of such reduced workforces, potential factory closures, inability to obtain materials, disruptions in the supply chain and potential disruption of transportation of goods produced in China or other countries adversely impacted by the coronavirus outbreak, or threat or perceived threat of such outbreak, we may be unable to obtain adequate inventory or samples sources from these regions, which could adversely affect our business, results of operations and financial condition. Furthermore, our existing suppliers, such as our suppliers located in India and Vietnam, or new suppliers or sources of materials may pass the increase in sourcing costs due to the coronavirus outbreak to us through price increases, thereby impacting our margins. Material changes in the pricing practices of our suppliers could negatively impact our profitability.

In addition, as of February 14, 2020, one of our distributors operates 18 stores in Greater China and has temporarily closed certain locations while its remaining locations are operating with reduced hours and experiencing significantly reduced consumer foot traffic, which we expect will result in lost sales. Moreover, our business, results of operations and financial condition could be further adversely affected if the coronavirus outbreak expands to other countries where we have a significant number of stores, partnerships with regional distributors and wholesalers and/or sourcing and manufacturing operations. If the retail economy weakens and/or consumer behavior shifts due to the coronavirus outbreak or threat or perceived threat of such outbreak, we or our distributors may need to significantly reduce or limit store operations and/or close additional stores and retailers may be more cautious with orders. A slowing or changing economy in the regions adversely affected by the coronavirus outbreak could adversely affect the financial health of our distributors and wholesale partners, which in turn could have an adverse effect on our business, results of operations and financial condition. While

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this global health emergency is expected to be temporary, the duration and intensity of the disruption is uncertain, including potential broader impacts outside of China if travel and tourist traffic is further restricted and there is a resulting decline in Chinese tourist spending in other regions. The dynamic nature and uncertainty of these circumstances may have adverse consequences on our results of operations for the fourth quarter of fiscal year 2020 and may negatively impact future fiscal periods in the event of prolonged disruptions associated with the outbreak.

Impact of Variability of Calendar on Comparability of Our Quarterly Results

Our fiscal year ends on the Saturday closest to May 31 and, consequently, our interim fiscal quarters typically end on the Saturday closest to the last calendar day of August, November and February. The following table sets forth the percentage of our total revenue represented by each of our fiscal quarters over the last two fiscal years: