Cato Fashions is closing enough underperforming stores to bring its total shutdowns over the past year to 120, as the company cites mounting pressure on shoppers' discretionary income.
The Charlotte, North Carolina-based clothing chain said in a Sept. 18 news release that it will shut more weak locations in the third and fourth quarters of 2026. That push lifts closures over the last year to 120, a steeper cut than the company laid out earlier.
USA TODAY reported that Cato began the year with 1,069 stores in 31 states and, as of Oct. 1, stood at 850. The chain started as a family-owned shop in Sumter, South Carolina, in 1946 and now sells women's clothing in stores and online in sizes 2 to 28.
Chairman, president, and CEO John Cato tied the decision to shoppers who have less room in the budget for clothes. The company no longer plans to carry marginal stores for another year on hope alone.
Cato reviews about one-third of its stores each year. Profitable sites can keep their leases. Weak ones can be cut.
In years past, the company gave borderline locations more time. That approach is changing.
John Cato said in the release:
"In years past, marginal stores were renewed for an additional year to give the store more time to improve its sales trend and profitability."
He added:
"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."
That is a plain admission from the top. When households guard every dollar, fashion chains feel it first at the mall door and the strip-center register.
Earlier in 2026, Cato told federal officials and said in a prior release that it would open 10 stores and close 40 to 50. The new total of 120 shutdowns over the last year shows how fast the math moved.
During 2025, the company closed 48 stores. By August 2026 it had already closed a dozen more. The latest round targets additional underperforming sites before year-end.
Expected costs sit between $1 million and $1.3 million. Most of that covers discarded exterior signs and fixtures, plus store systems sent back to corporate offices.
USA TODAY asked the company on Oct. 1 how the cuts will affect workers. No answer appears in the reporting so far. Specific addresses for the next wave of closings were not listed either.
Even after the cuts, Cato remains a large regional player. Texas leads with 140 locations. North Carolina has 81. Georgia has 67. Other counts include South Carolina at 50, Tennessee at 51, Louisiana at 45, Mississippi at 42, and Virginia at 42, with smaller clusters from Florida to the Midwest and Mountain West.
The company's own pitch is straightforward. Its website says, "Style should never be limited by size," and promises "fashion that fits your life, your budget and your unique style." Budget is the pressure point the CEO named.
Retailers do not close 120 stores in a year because business is booming. They close them when sales trends stay flat and lease renewals no longer make sense. Cato's own timeline, 48 closings in 2025, a dozen more by August 2026, then another wave in the second half of the year, shows a company pruning hard rather than waiting for a turnaround that management no longer expects.
John Cato did not blame a single bill or headline. He pointed to the economic environment and to customers whose discretionary income is under strain. That is the same squeeze millions of households describe when groceries, rent, insurance, and gas leave less for apparel.
A chain that once renewed weak stores for another year is now terminating leases instead. The annual review process gives cover for that choice. The sales data, in management's telling, no longer justify hope.
Shoppers still get the online option and hundreds of remaining stores. Taxpayers are not being asked to prop up empty retail space. Lease discipline is what private companies are supposed to practice when the customer stops spending freely.
When a 80-year-old fashion retailer locks the doors on underperforming sites, it is not a branding exercise. It is a balance-sheet verdict on how little spare cash many customers have left.