Popular children's retailer closing 150 stores

When you have kids, you don't just take on the responsibility of raising them. You also take on a world of expenses. And these days, a lot of parents are struggling.

A whopping 59% of parents have gone into debt just to meet their children's needs, according to a 2025 National Debt Relief survey. And 42% of U.S. parents have credit card debt, with the average balance clocking in at $14,556.

Given that so many parents are struggling with higher costs, it stands to reason that some are cutting back on spending wherever possible to keep their debt to a minimum. That could mean skipping nonessential clothing purchases and favoring secondhand apparel over items that are new.

That’s bad news for clothing retailers, though. And while parents may be more likely to cut back on apparel purchases for themselves rather than their kids, when push comes to shove, many will do whatever's needed to stay afloat.

Meanwhile, one popular children’s clothing retailer is gearing up to close stores after a disappointing fiscal quarter.

If this trend continues, parents could be left with fewer choices for kids’ apparel, exacerbating their financial pain.

Carter’s shares key store closure update

Carter's is a name any parent of young children is apt to recognize. The company operates  more than 1,000 retail locations in North America and Mexico and owns several popular clothing brands, including OshKosh B'gosh. 

But Carter’s unveiled some disappointing numbers during its most recent earnings call. 

Related: Sam's Club makes bold move to win over Costco members

During the company’s third fiscal quarter, net sales fell 0.1% to $757.8 million, compared to $758.5 million a year prior.

Net income, meanwhile, plunged substantially to $11.6 million, down from $58.3 million on a year-over-year basis.

Now, the company is making plans to close 150 stores. It's also doing a corporate restructuring that will leave 300 office employees out of a job.

Most of the closures will be U.S. stores, but a few of the closures are slated for locations in Canada and Mexico. Roughly 100 stores will be closed during fiscal year 2025 and 2026, with additional closures to come later. 

"As we've discussed previously, our physical store fleet must be honed," said Carter's CEO and President Douglas Palladini.

A troubling retail trend is emerging

Carter's isn’t the only U.S. retailer that’s been battered by lingering inflation. And now, tariffs are wreaking further havoc. 

Since Carter's sources a large portion of its product line from Asian countries, tariffs are eating into the company’s profits in a very serious way. The company has also seen a decline in the U.S. wholesale space as the big-name retailers it supplies rethink their own inventory needs. 

Related: Aldi adds convenient new perk many customers can’t afford

Carter's is trying to minimize the impact of tariffs by sourcing its merchandise more strategically. It’s a strategy many retailers are adopting during these uncertain times. But whether it works is a different story. 

Meanwhile, if Carter’s continues to struggle, it’s consumers – most notably parents – who stand to get hurt. 

Carter's not only operates its own stores, but is also the largest supplier of young kids’ apparel to major department stores and big-box retailers, including:

• Macy’s 
• Walmart
• Target

If the company’s financial struggles continue, it may join the ranks of the numerous retailers that have resorted to bankruptcy in recent years. 

A Carter’s bankruptcy could spell disaster for parents who rely on the company’s products to clothe their children during their early years. While other companies produce children’s apparel, losing a key player could leave parents with fewer choices – and higher costs. 

Closing underperforming store locations could help shore up Carter’s balance sheet enough to weather the ongoing tariff storm. But it remains to be seen whether that strategy saves the company in the long run.

Related: Costco’s aggressive new tactic upsets members