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TechCrunch  Apr 21  Comment 
 Privacy campaign group Privacy International says documents it has obtained through a legal challenge to the UK security agencies data-harvesting practices illustrate the extent to which spies have systematically and secretly amassed a cache of...
Insurance Journal  Apr 19  Comment 
Fire chiefs in rural Cache Valley say when someone calls 911, they always manage to send a team to help, but the harsh reality is they don’t have enough volunteers to handle daytime calls. “It’s a tough time to scare …
Forbes  Apr 11  Comment 
Partnerships between musicians and brands have been multiplying as of late. For many artists, it is a great way to make a few extra bucks, while brands get the cache of being connected to a well-liked figure. This is of course nothing new, but...
Yahoo  Apr 4  Comment 
The head of a Panama-based law firm at the center of a massive leak of offshore financial data on Sunday denied any wrongdoing, and said his firm has fallen victim to "an international campaign against privacy". German newspaper Sueddeutsche...
Financial Times  Mar 10  Comment 
Documents handed to German agency expected to facilitate prosecution of terror suspects
Mondo Visione  Feb 29  Comment 
Exegy Inc., a leading provider of managed services and low-latency technology for market data normalization and distribution, has announced today the availability of Edge Cache distribution appliances that extend the reach of its Data Tone service...
Times Online  Feb 29  Comment 
A cache of automatic weapons smuggled from eastern Europe into a Kent marina was “capable of unleashing carnage on a terrifying...
Yahoo  Feb 24  Comment 
PLAINWELL, Mich. (AP) — A man accused of randomly killing six people in Michigan had a personal cache of weapons that included handguns and long guns, but there was nothing in his past that prevented him from owning as many guns as he could afford.
Wall Street Journal  Jan 15  Comment 
In the race among tech companies to attract top talent in artificial intelligence, Yahoo is giving away a huge amount of data about how users interact with its services.




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Cache, Inc. (CACH) is a specialty retailer, which operates stores selling women's apparel and accessories under the names Cache and Cache Luxe. Each of these store concepts carries its own distinctive brand merchandise, which includes sportswear, dresses, and accessories (jewelry, belts, and handbags meant to complement the sportswear and dress categories). Cache targets women between the ages 25 and 45. Cache Luxe is the company's newest store concept that was rolled out to replace the Lillie Store concept. Cache Luxe stores will offer a larger selection of casual and evening apparel and accessories at higher price points. Meanwhile, the company recently decided to close its Lillie Rubin stores by the end of the third quarter. The company ended 2007 with 296 total stores, primarily situated in central locations in high traffic and upscale malls throughout the US. Cache also sells merchandise online through its website: www.cache.com.

The investment thesis for buying shares of Cache is the strength of the company's core Cache store concept, its direct sourcing efforts, and its healthy balance sheet.

Cache believes it can expand its total store count to 350 Cache stores, up from about 300 stores today. Part of the plan has been to increase its total square footage in the mid-single digits. Along with ramping up its store count, Cache has also been progressively refurbishing existing stores to enhance the customer-shopping experience. In addition, the company is not growing just for the sake of growth its strategy is to improve its profit margins with solid sales growth. Specifically, Cache's long-term growth strategy includes significantly increasing its operating profit margin to 15%, up from 7.5% in 2005, 6.3% (excluding Lillie Rubin exit costs) in 2006, and around 3.4% in 2007. To facilitate its profit margin expansion, the company's strategy has been to reduce the number of stock keeping units (SKUs) in its stores and the number of vendors from which it buys. Cache also has established a merchandising process that provides it with shorter product lead times. The shorter lead time enables the company to alter its merchandise mix to take advantage of popular offerings and reduce or eliminate unpopular items. The combination of a smaller number of product offerings on its shelves, fewer vendors, and shorter lead times enables the company to better manage its inventory. This should help minimize working capital requirements and boost profit margins. With that in mind, the company announced the acquisition of its largest supplier and believes it can have 40% of its merchandise directly-sourced by year-end 2007. This should help boost profit margins in 2008 and beyond. By seeking to grow its business profitably, Cache should be able to smartly manage its long-term store expansion, which should lead to several years of strong sales and earnings growth. In addition, the closing of its poorly performing Lillie Rubin stores should help boost profit margins. For the last two years, Lillie Rubin has been a consistent drag on the company's sales growth and profit margins. Additionally, the company maintains a pristine balance sheet with just $4.6 million in long-term debt with a debt-to-equity ratio of 4.2%. Cache's balance sheet and solid cash flows provide the company with the financial flexibility to internally finance its long-term growth plans, weather the current spending slowdown, or buyback shares. Note: the company recently announced a 3 million share buyback.

Lastly, the stock is down about 60% in the last twelve months, due to difficult environment for retailers and the company's soft results. But, we expect the company's performance to improve in the quarters ahead. We view this level as an attractive entry point for purchasing the shares.




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