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1 Piper Jaffray Investor Conference New York, NY June 9, 2011.

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Presentation on theme: "1 Piper Jaffray Investor Conference New York, NY June 9, 2011."— Presentation transcript:

1 1 Piper Jaffray Investor Conference New York, NY June 9, 2011

2 2 We make forward-looking statements in this presentation which represent our expectations or beliefs about future events and financial performance. Forward- looking statements are identifiable by words such as believe, anticipate, expect, intend, plan, will, may and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties, including those described in the Companys filings with the Securities and Exchange Commission. In addition, actual results could differ materially from those suggested by the forward-looking statements, and therefore you should not place undue reliance on the forward-looking statements. Safe Harbor Statement

3 3 Todays Presentation Discussion Topics Who We Are Strategic Initiatives Financial Highlights 2011 Outlook

4 4 Discussion Topics Who We Are

5 5 General Characteristics Nationwide, Mall-Based, Integrated Lifestyle Womens Apparel Retailer Fashion-Forward With a Contemporary Fit Upscale Product Geared At Style-Conscious Women Boutique Store Environment: 2,000 Sq. Ft. Diversified Product Mix: Sportswear, Dresses, Accessories Operates 280 Stores in 43 States General Characteristics

6 6 What We Offer Sophisticated and Contemporary Day and Evening Sportswear, Dresses and Accessories Sportswear $35 - $280 Dresses $75 - $420 Accessories $5 - $100 MerchandisePrice Points Mix

7 7 Contemporary & Modern 24 to 45 Years In Age: Attitude Youthful, Confident and Fashion-Conscious Target Customer

8 8 Provides an important differentiation from other mall-based retailers because of unique offering, quality of product and price points Key Differentiators Loyal customer base through consistency in interpreting fashion trends Capitalizing on growth in key fashion areas and implementation of forward looking strategy

9 9 Stronger & More Efficient Supply Chain Shift to Traditional Nine- Month Calendar Change from fast track three-month calendar to more traditional nine- month cycle Access to better fabrications Earlier planning enables upcoming collections to be presented to the press for inclusion in fashion magazines – increasing brand awareness Planning The re-engineering of our merchandise processes has improved our financial performance and enabled us to elevate our product offerings to meet our customers lifestyle needs Taking Strides in Planning Efforts Increasing flow of new deliveries to stores and taking markdowns on slower moving styles sooner Adjusting flow and quantity of styles to create a greater sense of urgency for customers to shop Accelerated inventory turns improving financial performance Greater Visibility & Better Pricing Earlier planning has facilitated the sourcing of higher quality fabrics and enabled us to broaden our assortments Higher percentage of goods from overseas factories to mitigate rising production costs Increased use of ocean freight instead of air freight, resulting in significant savings Planning Production CalendarPlanningSourcing & Production

10 10 Recent financial performance a result of strategies put into place in 2010 Strengthened design & merchandising leadership and enhanced business processes Elevated product offerings and more cohesive assortments Impactful brand marketing with reduced promotional behavior Production calendar shift, increased planning efforts, greater sourcing visibility Gross margin improvement driven by reduced markdowns, leverage on merchandise, buying and occupancy costs Learnings from installation of traffic counters in select stores helping to drive conversion rates and optimization of labor scheduling Improvement in comparable store sales trend 1 st Quarter 2011: +8% Positive comp trends continued into Q2 Notable Developments

11 11 Discussion Topics Strategic Initiatives

12 12 Strategic Initiatives Gross Margin Improvement Drive e-Commerce Platform Optimize Labor Scheduling Increase Conversion Expand Market Reach Further Improve Inventory Turnover

13 13 Gross Margin Improvement Continued Gross Margin Expansion 770 Basis Point Improvement to 42.1% in Q1 2011 Increased Flow of New Deliveries and Consistently Strong Selling Assortments Leverage on Merchandise, Buying and Occupancy Costs from Higher Sales Increased Prices, Lower Markdowns and Re- Focused Promotional Cadence

14 14 Increasing Flow of New Regular-Price Merchandise to Selling Floor More Efficient Replenishment Strategy Through Third Party Distribution Center Taking Markdowns in a More Strategic Manner Quickly Addressing Slower-Moving Styles Results in Improvement of Inventory Turns and Profitability Further Improve Inventory Turnover Markdown Strategy

15 15 Drive e-Commerce E-Commerce Sales Grew 74% in Q1 2011 and Represented 5.5% of Total Business We Believe Channel Can Grow to Represent 10% or More of Total Business Web-Exclusive, Higher Priced Product New Upgraded Web Platform to Launch Q3 2011 Enhanced Navigation & Search Capabilities Dedicated e- Commerce Fulfillment Center Faster Shipping Times Lower Return Rate & Higher Customer Satisfaction

16 16 Optimize Labor Scheduling Fall 2010 – Installed 28 traffic counters in a variety of stores for the first time in Company history Goal was to collect data to begin to understand important measures like traffic patterns, conversion rates, service levels and sales opportunity Thorough analysis revealed that current labor coverage on the weekend did not support the sales volume on these significantly higher traffic days Conducted a test in 140 Cache stores in April 2011 Reallocated current scheduling and made an investment to add additional staff hours to support the weekends in these stores Results were highly successful and initiative was rolled out to entire chain for May 2011

17 17 Increase Conversion Large Opportunity to Increase Conversion Through Optimized Labor Allocation Improved Service Levels & Customer Focus Changes in Recruiting Methodology Huge Opportunity on Weekends When Traffic is Heaviest Will Lead to Improvement in Dollars Per Transaction and Overall Top Line Growth

18 18 Expand Market Reach Early Planning of Future Collections Inclusion in Press Events Placement in Fashion Magazines Excellent Brand Building Opportunity

19 19 Editors Event: April 2011 Changes in production calendar have made future assortments available to the press Intention is to garner editorial credit and features within fashion blogs and publications as well as create celebrity wardrobe opportunities Expect styles to have great placement ahead of the Fall selling season Plan to host events seasonally to build awareness and excitement for the brand First Ever Cache Fashion Editors Event in April 2011

20 20 Discussion Topics Financial Highlights

21 21 Comp Sales By Quarter Positive Recent Sales Trend Positive comp trend continues into Q2 despite more challenging comparisons

22 22 First Quarter 2011 Results

23 23 Strong, Stable Balance Sheet As of April 2, 2011 : $21.2mm in Cash & Marketable Securities $24.7mm Including Pre-Paid Rent Total Inventory of $23.0mm $3.3mm in Current Receivables Virtually Zero Long Term Debt Positive Cash Flow Continue to Grow Cash Position Strong Balance Sheet

24 24 Stores At A Glance

25 25 Second Quarter 2011 vs. 2010

26 26 Discussion Topics 2011 Outlook

27 27 2011 Outlook Return to Profitability in Q2 and Maintain Positive Cash Flow and Profitability for Full Year Achieve Positive Comp Store Sales in Mid- Single Digits for Q2 and Continue Forward Momentum Capital Expenditures Approximately $2mm for Full Year Key drivers Continue to Present Customers with Consistently Strong and Distinctive Selling Assortments AUR & Gross Margin Improvement Maintain Capital Discipline Focus On and Refine Key Initiatives that are Improving Business Efficiency and Driving Sales Performance

28 28 Piper Jaffray Conference New York, NY June 9, 2011

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