Cato Fashions to close 120 stores amid pressure on shoppers’ spending
Cato retail clothing store, Foley, Alabama
The Cato Corporation, parent company of Cato Fashions, plans to close 120 retail stores by the end of its fiscal year, FOX Business reported.
The backstory:
The Charlotte, North Carolina-based company operates more than 1,000 women’s apparel and accessories stores across 31 states. The planned closures represent more than 10% of its locations, according to Fast Company.
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Founded in 1946, Cato caters to budget-conscious shoppers, similar to retailers such as TJ Maxx and Ross Dress for Less.
The company also operates Versona, an upscale apparel, jewelry and accessories brand with 90 U.S. locations, as well as its It’s Fashion and It’s Fashion Metro brands, which have 119 stores nationwide.
What they're saying:
Last week, Cato announced it would close 120 stores, up from the 50 closures initially planned.
"Annually, we review approximately one-third of our stores to exercise available lease options or negotiate an extension based on each store’s performance, including store sales trends and current and projected store profitability," John Cato, the company chairman, president and CEO, said in a statement.
"In light of the current economic environment, especially with the negative pressure on our customers' discretionary income, we do not expect these marginal stores to improve appreciably," he added. "As a result, we are closing more stores than expected this year. We believe that closing these additional stores will have a positive impact on our operating results in fiscal 2027 and beyond."
By the numbers:
The company reported net income of $1.1 million in the second quarter, down from $6.8 million during the same period a year earlier, according to Fast Company.
The Source: The information came from FOX Business and a report by Fast Company, which detailed Cato Corporation’s planned store closures, its retail brands and its recent financial results. This story was reported from Los Angeles.