Cato Apparel Chain Plans to Close Dozens of Stores Under Heavy Retail Pressures

A women’s apparel retailer that serves price‑sensitive shoppers announced it will close 120 stores by the end of the fiscal year.

The Cato Corporation, which is the parent of Cato Fashions, operates more than 1,000 women’s apparel and accessories stores in 31 states.

These closures represent more than 10% of the company’s store portfolio, according to Fast Company.

Founded in 1946, Cato targets budget‑conscious consumers, similar to retailers such as TJ Maxx and Ross Dress for Less.

Cato Fashions, an American retailer of women’s apparel and accessories, will close 120 locations by the end of the fiscal year, the company said. (Getty Images / Getty Images)

Cato also operates two additional brands: Versona, an upscale apparel, jewelry, and accessories label with 90 U.S. locations, and the It’s Fashion and It’s Fashion Metro chains, which together operate 119 U.S. stores.

Last week, the Charlotte, North Carolina‑based corporation announced plans to close 120 stores, up from the original 50 it had disclosed.

Bright-colored tops hanging on a rack. (iStock / iStock)

Each year, we evaluate roughly one‑third of our stores to exercise lease options or negotiate extensions, taking into account sales trends and current and projected profitability, John Cato, chairman, president and chief executive officer, explained.

Given the present economic climate and the strain on customers’ discretionary spending, we do not anticipate that these marginal stores will improve substantially,” he said. “Consequently, we are closing more stores than previously planned, and we expect these actions to positively affect our operating results beginning in fiscal 2027 and thereafter.

In August, the company reported net income of $1.1 million for the second quarter, down from $6.8 million earned in the same period the prior year, according to the report.

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