Cato Fashions to Close 120 Stores by End of 2026

Cato Fashions, an 80-year-old women's apparel retailer, has announced plans to close approximately 120 stores by the end of its 2026 fiscal year. The company, headquartered in North Carolina, will target underperforming locations based on lease terms and profitability.

This move expands upon an earlier projection made in March, when Cato stated it would close between 40 and 50 locations in 2026 while opening 10 new stores. The increased number of closures reflects a reassessment of the brand's retail footprint.

"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 trend and current and projected store profitability," John Cato, chairman, president and CEO, said in a press release. "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."

Since the beginning of 2025, Cato has already closed 48 stores. As of October 2, the company was operating 850 stores across 31 states. Texas has the largest concentration of Cato stores with 140 locations, followed by North Carolina with 81, and Georgia with 67.

The cost associated with closing these 120 stores, including the removal of external signage and fixtures and the return of store systems, is estimated to be between $1 million and $1.3 million.

Cato Fashions is part of a broader trend of retailers adjusting their physical presence. T.J. Maxx, for example, has announced the closure of three U.S. locations in Massachusetts and Maryland, although specific dates have not been provided. Despite these closures, T.J. Maxx's parent company, TJX, plans to open 11 new stores in 2027. Other retailers like Nordstrom, Saks, and Macy's have also closed locations due to challenges such as high costs and declining foot traffic.