Apparel retailer Cache Q1 sales fall 4.5%

For the 13-week period ended March 30, 2013:

- Net sales decreased 4.5% to $53.5 million, from $56.0 million in the first quarter of fiscal 2012. Comparable store sales decreased 1.5%, which compares to an increase of 9.4% in the first quarter of fiscal 2012;

- Operating loss totaled $8.3 million, which included costs of $1.5 million associated with employee separation charges incurred, primarily due to the separation agreement with the former CEO, as well as severance for other corporate employees. This compares to an operating loss of $2.0 million in the first quarter of fiscal 2012;

- Net loss totaled $18.5 million, or $1.38 per share, which included a $10.2 million charge, or $0.76 per share, for an increase in the tax valuation allowance against net deferred tax assets and a $1.5 million charge, or $0.11 per share, in employee separation charge costs. This compares to a net loss of $1.2 million, or $0.09 per share, in the first quarter of fiscal 2012; and

- Adjusted net loss totaled $6.8 million, or $0.51 per share.

Jay Margolis, Chairman and Chief Executive Officer, commented: “Our first quarter results reflect our actions to intensify markdown activity on prior season assortments, primarily in sportswear and to reduce promotions on the web. This activity held back our performance in the quarter, yet was an important step as we prepare to introduce our marketing and merchandising strategies that engage our consumer demographic with brand right trends.

"We began to see elements of our initiatives, including a positive reaction to new date tops, event dresses and day dresses in the first quarter and expect that the continuing development and evolution of our strategies will have a greater impact on our performance during the second half of the year.”

“I am pleased with the progress that we are making across all facets of our organization to return our Company to profitability and growth,” Mr. Margolis, continued. “As we look ahead, we will continue to build upon our solid infrastructure to capitalize on the significant opportunities that lie ahead for our brand.

"To this end, we announced two senior leadership hires in merchandising and marketing and we increased our financial flexibility with the addition of $13.4 million in gross proceeds from the completion of our rights offering. I continue to be extremely excited by the potential of our Cache brand and remain confident that we are implementing the right strategies, possess the right team and have the balance sheet strength to allow us to achieve our sales productivity and profitability goals.”

Cache