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The budget fashion brand Cato Corporation, parent company to Cato Fashions among others, plans to close 120 stores across multiple states by the end of its fiscal year due to high inflation and fuel costs. This represents more than 10% of its over 1,000 total stores. CEO John Cato attributes the increased closures, from an initial plan of 50 to a total of 70 additional stores, to worsening economic conditions affecting consumer spending. The company expects these changes to improve future operating results despite incurring costs between $1 million and $1.3 million for store closures.
Written locally by qwen2.5:14b on 2026-09-28,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
Cato Fashions, a popular budget fashion brand owned by the Cato Corporation, plans to shut down 120 stores across 31 states by the end of their fiscal year, up from an initial plan of closing 50 stores. This decision comes as a response to high inflation and increased fuel costs that have negatively impacted customers' discretionary income. The company operates over 1,000 clothing stores, with the current economic environment forcing them to reassess store performance based on sales trends and profitability projections. John Cato, the CEO of the corporation, explained in a statement that these closures are necessary due to the lack of expected improvement in marginal stores' performance.
Written for “Retail Store Closures” on 2026-10-05,
grounded in this article and the 0 other(s) covering the same event.
A hugely popular budget fashion brand is set to close 120 of its stores across dozens of states amid high inflation and fuel costs.
asserted
brand → set → inflation
More than 10 per cent of the Cato Corporation’s stores are set to close by the end of the fiscal year.
asserted
cent → set → year
As the parent company of Cato Fashions, the company operates more than 1,000 clothing stores across 31 states.
asserted
company → operate → states
“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’s CEO, said in a statement.
asserted
Cato → review → 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 continued.
asserted
he → expect → income
“As a result, we are closing more stores than expected this year.”
asserted
we → close → stores
Initially, the Cato Corporation had planned to close 50 of its stores before increasing this amount by 70 additional stores on September 18.
asserted
Corporation → plan → September
The closures are expected to cost between $1 million and $1.3 million as operations wind down at each location.
asserted
operations → expect → location
John Cato says that he thinks the closures will benefit the company at large.
asserted
closures → say → company
“We believe that closing these additional stores will have a positive impact on our operating results in fiscal 2027 and beyond,” he said.
asserted
he → believe → 2027
The firm has been battling a decline in sales from Q2 in 2025 to Q2 in 2026, confirming in a press release that sales had fallen from $174.7 million in the previous period to $163.9 million in the latter.
asserted
sales → battle → latter
Overall, the company reported in August that its net income in Q2 2026 was just $1.1 million, compared to $6.8 million in the same period a year earlier.
asserted
income → report → period
“Our results in the quarter are in large part due to the continued pressure on our customers' discretionary income, which is being negatively impacted in part by persistent inflation, higher fuel prices and continued elevated interest rates,” John Cato said at the time.
asserted
Cato → impact → time
The company is far from the first business to close locations as increased fuel prices and higher inflation put strain on household budgets.
asserted
prices → close → budgets
Other large chains have confirmed closures too, including fast-food giant Wendy’s, which stated in May that it wanted to shutter between 5 and 6 percent of its stores.
uncertain
it → confirm → stores
The Cato Corporation will continue to maintain its massive network of stores.
asserted
Corporation → continue → stores
In its August press release, the chain confirmed that it operated 1,057 stores across 31 states.
asserted
it → confirm → states
Cato Fashions is just one branch of the “value-priced” chain’s network, which also includes Versona and It’s Fashion.
asserted
which → price → Versona
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