COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 29, 2012

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 10. COMMITMENTS AND CONTINGENCIES

Leases

         At December 29, 2012, 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		52 Weeks Ended
	December 29, 2012		December 31, 2011		January 1, 2011
Net minimum rentals	$	22,918,000	$	22,951,000	$	22,796,000
Other occupancy costs including contingent rentals		11,155,000		10,700,000		10,628,000
	$	34,073,000	$	33,651,000	$	33,424,000

         Rent expense for our New York City offices amounted to approximately $1.2 million for 2012 and approximately $1 million for fiscal 2011 and 2010.

         Future minimum payments under non-cancelable operating leases consisted of the following at December 29, 2012:

Fiscal years ending:
2013	$	24,648,000
2014		20,557,000
2015		16,703,000
2016		14,373,000
2017		9,250,000
Thereafter		25,241,000
Total future minimum lease payments	$	110,772,000

         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 2012, or other occupancy costs such as promotional funds, common area maintenance and heating, ventilation and air conditioning charges, which represented approximately 47.9% of net minimum rent expense in fiscal 2012.

Other Commitments

         The following tables summarize our other commitments as of December 29, 2012:

	Payments Due in Period
	Total		2013		2014		2015		2016		2017		Thereafter
	(in thousands)
Other Obligations
Employment Contracts	$	1,292	$	600	$	600	$	92	$	—	$	—	$	—
Purchase Obligations		38,954		38,954		—		—		—		—		—
Letters of credit		2,094		2,094		—		—		—		—		—
Total	$	42,340	$	41,648	$	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 2013, the Company entered into a separation and general release agreement with Thomas E. Reinckens and an employment agreement with Jay Margolis our new Chairman and Chief Executive Officer (See Note 15).

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 or operations. 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 29, 2012 and December 31, 2011.