John Cato, the company’s chairman and CEO, noted that the retailer typically reviews one-third of its stores annually to weigh lease renewals against performance metrics. While the firm previously granted marginal locations extra time to recover, the current economic climate has forced a change in strategy. Management no longer expects these underperforming sites to see significant improvement, opting instead to exit leases to bolster operating results for 2027.
In section Releases
Cato Corporation to Close 120 Stores Amid Economic Headwinds
The Cato Corporation is accelerating its retail footprint reduction, announcing the closure of 70 additional underperforming locations throughout the third and fourth quarters. This move brings the total number of planned store shutdowns for fiscal year 2026 to approximately 120, as the retailer grapples with shrinking consumer discretionary income.
The company expects to spend between $1.0 million and $1.3 million to finalize these closures by the end of 2026. These costs primarily cover the removal of signage, the disposal of fixtures, and the transition of store systems back to corporate headquarters. Because these exits coincide with the natural expiration of lease terms, Cato will avoid further rental obligations for these specific properties beyond the current calendar year.
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