COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2011

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 13. COMMITMENTS AND CONTINGENCIES

Leases

        At December 31, 2011, the Company was obligated under operating leases for the corporate office, as well as another location that houses our design, production and customer service departments and various store locations expiring at various times through 2028. The terms of the leases generally provide for the payment of minimum annual rentals, contingent rentals based on a percentage of sales in excess of a stipulated amount, and a portion of promotional funds, common area maintenance and heating, ventilation and air conditioning charges. Most leases contain leasehold improvement reimbursements from landlords and/or rent holidays. In recognizing landlord incentives and minimum rent expenses, the Company amortizes the charges and incentives on a straight line basis over the lease term.

        Store rental expense related to these leases, included in cost of sales, consisted of the following:

	52 Weeks Ended		52 Weeks Ended		53 Weeks Ended
	December 31, 2011		January 1, 2011		January 2, 2010
Net minimum rentals	$	22,951,000	$	22,796,000	$	23,647,000
Contingent rentals and other occupancy costs		10,700,000		10,628,000		11,296,000
	$	33,651,000	$	33,424,000	$	34,943,000

        Rent expense for our corporate office and our facility, which houses our design, production, sourcing and customer service departments, amounted to approximately $1 million for fiscal 2011, 2010 and 2009.

        Future minimum payments under non-cancelable operating leases consisted of the following at December 31, 2011:

Fiscal years ending:
2012	$	24,878,000
2013		21,450,000
2014		16,935,000
2015		12,844,000
2016		10,517,000
Thereafter		15,293,000
Total future minimum lease payments	$	101,917,000

        The operating leases included in the table above do not include contingent rent based upon sales volume, which represented less than 1% of net minimum rent expense in fiscal 2011, or other occupancy costs such as promotional funds, common area maintenance and heating, ventilation and air conditioning charges, which represented approximately 46.6% of net minimum rent expense in fiscal 2011.

Other Commitments

        The following tables summarize our other commitments as of December 31, 2011:

	Payments Due in Period
	Total		2012		2013		2014		2015		2016		Thereafter
	(in thousands)
Other Obligations
Employment Contracts	$	2,246	$	954	$	600	$	600	$	92	$	—	$	—
Purchase Obligations		37,676		37,676		—		—		—		—		—
Letters of credit		2,263		2,263		—		—		—		—		—
Total	$	42,185	$	40,893	$	600	$	600	$	92	$	—	$	—

        We issue letters of credit primarily for the importation of merchandise inventories and as security deposits for our corporate office. The Company does not have any off-balance sheet financing arrangements.

        In February 2012, Cache entered into a new employment agreement with the Company's current Chairman and Chief Executive Officer—Thomas E. Reinckens. The agreement commenced on February 24, 2012 for a term of three years expiring on February 23, 2015. The previous agreement was due to expire in February 2012.

        In October 2009, Cache entered into an employment agreement with Rabia Farhang, the Company's new Executive Vice President and General Merchandise Manager. The agreement is for a term of three years, expiring in November 2012.

Contingencies

        On June 30, 2010, Chico's FAS, Inc. and White House--Black Market, Inc. (together referred to as "Chico's") filed a lawsuit against the Company in the Supreme Court of the State of New York, County of New York. Chico's alleged in its complaint, among other things, that two former Chico's employees who are now employed by Cache supplied the Company with confidential information and trade secrets, which Cache benefited from. In April 2011, the Company amicably resolved all claims in the lawsuit filed by Chico's. The terms of the settlement were confidential. The resolution of this lawsuit did not have a material adverse effect on the Company's financial condition. The Company received an insurance reimbursement of $450,000 for the recovery of legal fees paid in connection with this lawsuit. This reimbursement was recorded in general and administrative expenses in fiscal 2011.

        The Company is exposed to a number of asserted and unasserted potential claims. Management does not believe it is reasonably possible that resolution of these matters will result in a material loss. The Company had no guarantees, subleases or assigned lease obligations as of December 31, 2011 and January 1, 2011.