For the 13-week period ended June 27, 2009:

Net sales decreased 23.1% to $56.9 million from $74.0 million in the second quarter of fiscal 2008. Comparable store sales decreased 23.0%, as compared to an increase of 3.0% in the second quarter of fiscal 2008;

Net income totaled $845,000 or $0.07 per diluted share, as compared to net income of $2.1 million or $0.16 per diluted share in the second quarter of fiscal 2008.

Thomas Reinckens, Chairman and Chief Executive Officer, commented: "During the second quarter, we maintained a strong balance sheet, achieved earnings per share at the high end of our expectations and positive cash flow. At quarter end, cash and marketable securities totaled $34.8 million, and inventory declined 36% from the prior year. In addition, we generated $7 million in expense savings and are currently on track to achieve $23 million in cost reductions this year."

"While the weak consumer spending environment pressured our sales performance during the quarter, we are encouraged by the favorable response to our merchandise categories where we offer compelling value and differentiation in fashion, with particular strength in day dresses, value-priced accessories and tops," Mr. Reinckens continued. "We expect to expand upon the success of these areas this fall, as we emphasize affordability in our offerings and introduce new denim, casual and activewear assortments, which are in high demand by our customers."

"As we look ahead, we are confident that our fall assortments, which are delivered to our stores late August, will resonate with consumers and enable us to improve our comparable store sales performance as compared to the first half of the year," Mr. Reinckens stated. "While the third quarter typically represents a loss for our Company given our calendar year, we are confident that our strategies of offering enhanced value, differentiation and expanded assortments appropriate for day to allow us to garner increased market share. Our focus for the balance of the year will be to continue to strengthen our balance sheet and achieve positive cash flow, while maximizing opportunities to build sales and reduce product costs, as we move to increased overseas sourcing. We believe this strategy will enable us to become a stronger Company with increased sales and profit potential and lead to increased long term value for all Cache stakeholders."

For the 26-week period ended June 27, 2009:

Net sales decreased 22.5% to $109.9 million from $141.7 million in the first six months of fiscal 2008. Comparable store sales decreased 21.9% following a 3.1% gain in the first six months of fiscal 2008;

Net loss was $751,000 or ($0.06) per share, as compared to net income of $52,000 or breakeven on a per share basis in the first six months of fiscal 2008. Results in the first six months of fiscal 2008 included charges, net of taxes, of: $1.5 million or $0.11 per diluted share related to store closures and $388,000 or $0.03 per diluted share related to the management change in January 2008; and

Adjusted net income for the first six months of fiscal 2008 was $1.9 million or $0.14 per diluted share and excludes store closure and management change costs.

Gross profit for the second quarter of fiscal 2009 was $25.2 million, or 44.4% of net sales, compared to $34.2 million, or 46.2% of net sales, in the second quarter of fiscal 2008. For the first six months of fiscal 2009, gross profit was $47.0 million, or 42.8% of net sales, compared to $62.6 million, or 44.2% of net sales, in the first six months of fiscal 2008. The decline in gross profit margin for the second quarter and first six months of fiscal 2009 was primarily driven by deleverage in occupancy costs resulting from lower sales. This was partially offset by higher initial markup due to improved sourcing and reduced freight costs, as compared to the prior year.

In total, operating expenses were $23.9 million, or 42.0% of net sales, as compared to $31.0 million, or 41.9% of net sales, in the second quarter of fiscal 2008. For the first six months of fiscal 2009, total operating expenses were $48.2 million, or 43.9% of net sales, compared to $62.9 million, or 44.4% of net sales, in the first six months of fiscal 2008. Operating expenses for the first six months of fiscal 2008 included $2.9 million of charges, primarily related to store closures. The decrease in operating expenses for the quarter and first six months of fiscal 2009 was primarily driven by a reduction in store payroll, depreciation and advertising costs, lower general and administrative costs and the effect of the above-mentioned one-time charges incurred during the first six months of fiscal 2008.

At June 27, 2009, cash and marketable securities totaled $34.8 million and compares to $27.4 million in cash and marketable securities at June 28, 2008. Total inventory at cost decreased 36% at quarter end from the prior-year period. Working capital decreased by $2.2 million to $45.7 million from $47.9 million at June 28, 2008, primarily due to reduced profitability.