Copyright M Live Michigan
Carter’s confirmed Monday it plans to close 150 stores over the next three years while increasing prices for customers. The national retailer specializing in clothing for babies, toddlers and young children confirmed the moves while revealing its financials for the third quarter of fiscal 2025. The Atlanta-based company operates more than 1,000 stores in North America, and distributes its brands to retailers like Walmart, Target and Amazon. Known brand names owned by the company include OshKosh B’Gosh, Just One You, and Simple Joys. Sales for the quarter were down just 0.6% compared to the same quarter in 2024. However, profits are down 80% from $58.3 million in third quarter 2024 to $11.2 million in third quarter 2025. For the year, profits are down about 77% compared to 2024. The biggest cause for the profit decrease comes from added expenses triggered by tariffs put in place by President Donald Trump. “Our third quarter performance reflected continued improvement in U.S. Retail business demand as we achieved positive comparable sales and improved pricing for the second consecutive quarter,” said Douglas C. Palladini, Chief Executive Officer & President. “However, elevated product costs, in part due to the impact of higher tariffs, as well as additional investment, weighed meaningfully on our profitability.” In the earnings report, Carter’s said it expects the impact of tariffs to be around $200 million to $250 million on an annualized basis. To offset the costs, the company says it plans over time to do so “through a combination of changes to its product assortments, cost sharing with its vendor partners, changes to the mix of its production by country, and raising prices to end consumers and its wholesale customers.” As a result of the decreased income, the company has expanded its previously announced plans to close 100 locations to now include 150 stores in the next three years. Of those closures, the company anticipates 100 stores will be closed over fiscal years 2025 and 2026. Carter’s says it will close the stores as leases expire in North America. The 150 stores represent approximately $110 million in annual net sales over a 12-month span. The company will also lay off roughly 300 corporate positions, amounting to approximately 15% of the corporate workforce. Carter’s expects the move to save the company $35 million annually. Palladini went on to say he and the board of directors will reduce their compensation in 2026. Starting next year, Carter’s will also target more than $10 million in annual spending reductions.
