Cato, the affordable women's clothing chain, will close 120 stores this year. Its CEO says customers' spending money is under pressure.

Pour a cup and brace yourself. Cato, the Charlotte-based women's clothing chain known for affordable fashion, says it will close 70 "underperforming" stores in the third and fourth quarters of 2026, bringing this year's closures to 120, AL.com reports. The chain operates more than 1,000 stores across 31 states, plus 90 Versona locations and 119 more under its It's Fashion and Fashion Metro banners. The numbers explain the decision. Second-quarter sales were $163.9 million, down about 6% from a year earlier. Same-store sales fell 3.7%, and net income dropped to $1.1 million from $6.8 million. CEO John Cato said the company reviews about a third of its store leases every year, and marginal stores used to get another year to turn things around. Not this year. "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 said. Store-owner math: when a lease comes up, you ask one question. Will this spot earn its rent next year? When your regulars have less left over after the bills, a dress shop in a strip center has a hard time answering yes, and a second chance becomes a luxury for good times. Kitchen-table translation: Cato sells to working families who watch every dollar, so when its CEO says their discretionary income is squeezed, that's a report from the checkout line, not the boardroom. If the Cato near you closes, it won't be because folks stopped needing clothes. It'll be because the extras got squeezed out of the budget first.