10. RISK FACTORS

Risks relating to the Group and its business include (but are not limited to):

• Jewellery purchases are discretionary and may be particularly affected by adverse trends in the general economy.
• The ability of the Group to recruit, train and retain suitably qualified sales staff is important in determining sales and profitability.
• Short term variations in consumer preferences, merchandise selection, inventory and pricing have an important influence in determining sales performance and achieved gross margin.
• The ability to differentiate the Group's stores from competitors by its branding, marketing and advertising programmes is a factor in attracting consumers.
• Long term changes in consumer attitudes to jewellery influence the level of Group sales.
• The Group's results are dependent on a number of factors relating to its stores.
• If the Group falls behind competitors the Group's operating results or financial condition could be adversely affected.
• The abrupt loss or disruption of any significant supplier during the three month period leading up to the Christmas season could result in a material adverse effect on the Group's business.
• The jewellery industry generally is affected by fluctuations in the price and supply of diamonds, gold and, to a lesser extent, other precious and semi-precious metals and stones.
• The Group's business is highly seasonal, with a very significant proportion of its sales and operating profit generated during its fourth quarter.
• Social, ethical and environmental matters influence the Group's reputation, demand for merchandise by consumers, the ability to recruit staff, relations with suppliers and standing in the financial markets.
• The Group is dependent on the suitability, reliability and durability of its systems and procedures, including its accounting, information technology, warehousing and distribution systems.
• In March 2008, a class action lawsuit for an unspecified amount was filed against a subsidiary of the Group in the New York federal court.
• Regulations govern various areas of business activity and changes in regulations can therefore influence the Group's performance.
• The presentation of the Group's accounts can be affected by changes to generally accepted accounting principles.
• The Group may in future make acquisitions or be involved in a business combination.
• In the UK, the Group operates a defined benefit pension scheme. The valuation of the Group Scheme's assets and liabilities partly depends on assumptions based on the financial markets as well as longevity and staff retention rates.
• The Group is dependent upon the availability of equity and debt financing to fund its operations and growth.
• Any decrease in the weighted average value of the US dollar against the pound sterling could increase reported revenues and operating profit and any appreciation in the weighted average value of the US dollar against the pound sterling could decrease reported revenues and operating profit.
• The loss of one or more key executive officers or employees or the inability to attract and retain other talented personnel could have a material adverse effect on the Group's ability to conduct its business.
• The Share Capital Consolidation and Admissions are conditional on the Scheme becoming effective.
• The Company's share price may be significantly affected by short term changes in financial condition or results of operations as reflected in its quarterly earnings reports, and other factors unrelated to the Group's performance.
• Sales or potential sales of large numbers of Common Shares in public markets could decrease the trading price of the Common Shares.
• An increase in the number of Common Shares in the capital of the Company in the market through further issues by the Company could result in the voting power of the Company's existing shareholders being diluted.
• Depositary Interest Holders do not have the rights which Bermuda law and the Byelaws confer on holders of Common Shares and there can be no assurance that the Depositary Nominee (in which these rights will vest) will pass on and exercise such rights for the benefit of Depositary Interest Holders.
• If the Bermuda Monetary Authority subsequently withdraws its consent to the free transferability of the Common Shares, then the admission and trading of those Common Shares on both the NYSE and the LSE's main market for listed securities may be suspended.
• The Company has no Takeover Code protection.
• The Company cannot be certain that it will not be subject to any Bermuda tax in the future.
• The proposed secondary listing is subject to UKLA approval.
• As a result of the secondary listing certain provisions of the Listing Rules will not apply to the Company.
• It may be more difficult for investors to effect service of process on the directors of the Company in the UK or to enforce in the UK judgments obtained in UK courts against the Company or those directors.
• The Company will be subject to more extensive US regulation if it no longer satisfies the definition of a "foreign private issuer" under the rules and regulations of the SEC.