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Forbes  May 7  Comment 
Aston Martin is among the more revered automotive brands, with a name that carries the same cache as names like Bentley or Porsche. It's also the only automotive brand to enjoy a 50-plus-year association with Britain's most popular secret...
OilVoice  May 1  Comment 
Red Sky Energy Limited wishes to advise revisions to the proposed capital raising that the Company is undertaking in association with its purchase of a 50 interest in the US based Cache Oilfield Col
New York Times  May 1  Comment 
German authorities seized a cache of weapons, including a pipe bomb, and chemicals that can be used to make explosives when they raided a home outside Frankfurt.
guardian.co.uk  Apr 23  Comment 
Regulators release string of embarrassing messages showing attempts to move rate used to price £3.5tn of financial contracts Germany’s Deutsche Bank has been fined a record $2.5bn (£1.7bn) for rigging Libor, a benchmark rate that some of the...
New York Times  Apr 21  Comment 
The cache, which the Indian Navy said weighed about 500 pounds, was found aboard a Pakistani vessel; eight Pakistanis were detained.
FierceBiotech  Mar 19  Comment 
Juno Therapeutics quickly built a reputation as one of the hottest biotechs in the world, raising hundreds of millions of dollars inside a year and capping it with a go-go IPO for its cancer drug pipeline that helped inspire a surge for the...
New York Times  Mar 19  Comment 
Mr. Elias was the closest living relative of Anne Frank, and his house yielded a cache of long-forgotten letters from Anne and her family that formed the basis of a recent book.
OilVoice  Mar 16  Comment 
Red Sky Energy Limited is pleased to announce that it has now executed a definitive document to acquire a 50 interest in the US based Cache Oilfield Colorado. The board is delighted with this outcom
Reuters  Feb 19  Comment 
U.S. authorities are investigating whether a hacker is behind the online publication of a cache of Morgan Stanley's client data and not the financial adviser who was fired in connection with the breach, the Wall Street Journal reported, citing...




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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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