If you’ve seen headlines about Carter’s closing 150 stores, it’s easy to assume the worst. But “closing stores” and “going out of business” are two very different things — and in this case, the difference matters a lot.
This article breaks down exactly what’s happening: how many stores are closing, why, what else is changing inside the company, and what it means if you shop at Carter’s regularly.
Carter’s Is Not Going Out of Business
Let’s answer the main question right away: Carter’s is not shutting down. The company is not filing for bankruptcy. It is not liquidating its stores.
Carter’s is still the largest baby apparel retailer in the United States. Every credible news source covering this story — USA Today, Newsweek, Fortune, TheStreet — describes the situation as a structured turnaround plan, not a collapse.
The company is closing underperforming locations to cut costs and protect its margins. That is a business strategy, not a going-out-of-business announcement.
How Many Stores Are Closing and Over What Timeline
Carter’s has targeted approximately 150 low-margin store locations across North America for closure. This is happening over a three-year window, not all at once.
Around 100 of those 150 stores are expected to close by the end of fiscal years 2025 and 2026. Most closures are tied to lease expirations, meaning the company lets leases run out rather than breaking them early and paying penalties.
Carter’s has also paused all new U.S. store openings under its current retail model. This confirms they are focused on reducing their physical footprint, not expanding it.
One important thing to note: Carter’s has not published a public list of which locations will close. If you’re wondering about your local store, you’ll need to check the Carter’s store locator, watch for local news, or ask in-store staff directly.
Why Carter’s Is Closing These Locations
The short answer is margin pressure from multiple directions at once. Here is what is actually driving this decision.
Tariffs Are a Major Factor
Tariffs on imported goods have added an estimated $200 to $250 million in additional costs for Carter’s in 2025 alone. When your import costs jump by that much in a single year, something has to give.
The financial impact has been significant. Net income dropped more than 80% in one quarter — from $58.3 million down to $11.6 million. That kind of drop in a single quarter forces a company to act quickly.
Online Shopping Has Shifted Customer Behavior
Tariffs are not the only pressure. Customer shopping habits have shifted. More parents are buying children’s clothing online, which reduces foot traffic in physical stores. A store that used to be profitable five years ago may no longer justify its rent and operating costs today.
The Stores Being Closed Were Already Underperforming
Carter’s is specifically targeting low-margin locations. These are stores where revenue no longer covers the cost of running them. Keeping those stores open would hurt the overall business. Closing them is a straightforward cost-control decision.
Fortune and Fox 13 both point out that the combination of tariffs, product investment costs, and changing consumer demand all contributed. This is not a single-cause problem — it is several pressures landing at the same time.
What Else Is Changing Inside the Company
Store closures are just one part of a broader restructuring. Here is a clear breakdown of the other changes happening at Carter’s.
Office Job Cuts
Carter’s is cutting approximately 300 office-based roles, which represents about 15% of its corporate workforce. This refers specifically to office staff, not retail store employees across the board.
Board Pay Is Being Reduced
Even board member salaries are being trimmed as part of the cost-cutting effort. That detail is notable because it signals the company is applying pressure at every level of the organization, not just the front lines.
Product Range Is Being Simplified
Carter’s plans to reduce its product range by 20 to 30%. The goal is a more unified, streamlined assortment across markets. Fewer products means lower production complexity, easier inventory management, and less waste.
Expected Savings
The company projects roughly $35 million in annual savings from the combined effect of store closures and workforce reductions. That target gives the restructuring a concrete financial goal, which is what separates a real turnaround plan from vague cost-cutting talk.
OshKosh B’gosh Is Still Operating
Carter’s owns OshKosh B’gosh, and that brand continues to operate as part of the business. If you shop OshKosh, nothing has changed from a customer perspective based on current reporting.
What “Right-Sizing” Looks Like in Retail — and Why It Matters
Carter’s is not unique here. Many large retailers follow a predictable pattern that plays out over years.
Phase one: A retailer expands aggressively, opening hundreds of physical locations to capture market share.
Phase two: Costs rise. Online shopping grows. Some of those locations stop pulling their weight. Margins shrink.
Phase three: The company closes underperforming stores, cuts overhead, and focuses on channels that are actually profitable — whether that’s e-commerce, better-located stores, or wholesale partnerships.
Carter’s is in phase three. This is not unusual, and it does not automatically mean failure. Companies that manage this transition well often come out leaner and more stable on the other side. Companies that ignore it tend to end up in actual bankruptcy.
Think of it like a restaurant chain closing its slowest locations to keep the profitable ones healthy. The brand does not disappear — it restructures around what works.
For more context on how businesses handle restructuring and retail shifts, Daily Biz Notes covers these topics in practical terms for business owners and professionals.
What This Means If You Shop at Carter’s
If you are a regular Carter’s customer, here is what you actually need to know.
- Your local store may or may not be affected. Carter’s has not released a full list of closing locations. Most closures happen when leases expire, so there may be no sudden announcement.
- Carter’s online shopping continues as normal. The company’s e-commerce channel is not being shut down. If anything, the shift away from low-performing stores may mean more investment in online service.
- Carter’s products are also sold through other retailers. Even if a nearby store closes, Carter’s clothing is widely available through department stores and online marketplaces.
- Check the store locator for your nearest location. The Carter’s website is the most reliable way to confirm whether a specific store is still active.
Should You Be Worried About Carter’s Long-Term?
Based on current reporting, Carter’s is a company under financial pressure making deliberate choices to address that pressure. That is different from a company that is losing control of its situation.
The 80% drop in quarterly net income is serious, and the $200 to $250 million tariff impact is a real burden. But the response — structured closures, workforce reductions, product simplification, and a clear savings target — looks like a company trying to stabilize, not one spinning out.
No one can say with certainty how this plays out. Tariff conditions can change. Consumer demand shifts in ways that are hard to predict. But as of current reporting, Carter’s is executing a defined plan with specific financial goals, not heading toward liquidation.
If the situation changes materially, it will likely show up first in quarterly earnings reports and SEC filings — those are worth watching if you have a professional or financial interest in the company.
The Bottom Line
Carter’s is not going out of business. It is closing approximately 150 underperforming stores over three years, cutting around 300 office jobs, simplifying its product line, and targeting $35 million in annual savings.
The drivers are real — especially the tariff-related cost increases and shifting customer behavior — but the company’s response is structured and strategic, not a sign of imminent collapse.
If you shop at Carter’s, your best move is to check your local store’s status directly. If you are a business professional watching this as a case study in retail restructuring, Carter’s is a clear example of what phase-three right-sizing actually looks like in practice.
Read Also:
