American Fashion Chain Cato to Close 120 Stores in 2026

American fashion retailer Cato is shuttering approximately 120 stores during the 2026 fiscal year as part of a sweeping restructuring plan to combat ongoing financial losses. Founded in North Carolina in 1946, the budget women apparel chain operates 1,069 locations across 31 states under the Cato, Versona, and It's Fashion banners. CEO John Cato attributed the drastic downsizing to relentless inflation, high fuel prices, and elevated interest rates that severely strained middle- and lower-income household budgets.

The company emphasized that the closures do not signal bankruptcy or liquidation, but rather a strategic effort to eliminate unprofitable retail footprints after previously shutting 70 additional stores during the third and fourth quarters of the previous year. This latest wave of closures will eliminate more than 10% of the company national retail network, highlighting how persistent economic pressures continue to batter discount brick-and-mortar retail.