Charlotte-based retailer closes 5 stores in 3 months — and a bigger wave is coming
A Charlotte-based retailer closed five stores in the second quarter, bringing its total closures to 12 this year, SEC filings show. The women’s clothing shop plans to close approximately 60 more stores by the end of the year.
A Cato spokesperson was not available for comment Thursday to disclose which stores it had closed or the number of employees impacted, but its earnings report shows the closings have helped cut costs amid continued sales struggles.
Its sales, general and administrative costs, which include rent, utilities, commissions and salaries, were down 5.5% from the previous year, giving the company some financial wiggle room.
“We continue to manage our SG&A expenses tightly in line with our current sales trend,” Cato Chairman and CEO John Cato said in a Thursday press release.
Cato has 1,166 stores in 31 states as of Aug. 3. That’s a 7 percent decrease from the same time a year ago.
The Charlotte company pins much of its 8 percent second-quarter sales decline on the store closures. Cato also credited its sales slump to decreased consumer discretionary spending.
The retailer’s net income is up just over 50% in the first half of this year compared with the first half of last year.
“Although the second quarter sales trend improved .... we believe the back half of the year will remain challenging,” the Cato press release said.
About Cato
Founded in 1946 by the Cato family, Cato now sells women’s clothing and accessories under three concepts — Cato, Versona and It’s Fashion.
The Cato family is well-known for a commitment to supporting education in Charlotte and has played a significant role in starting the Cato School of Education at Queen’s University. UNC Charlotte’s Cato School of Education also honors the business and family.
