Carter’s to cut 150 stores, 300 office jobs. Tariffs are a big reason why.
Atlanta-based baby and children’s apparel maker Carter’s plans to cut 300 jobs, or 15% of its office workforce, and slash retail locations as the company contends with cost increases from new tariffs.
The company said Monday it expects to close about 150 stores in North America over the next three years as the leases expire. That is an increase from the 100 store closures announced last quarter.
The measures come as new tariffs weigh on the company’s profitability, Carter’s CEO and President Douglas Palladini said in a news release.
During his second term, President Donald Trump has implemented a series of new tariffs on countries across the world. Tariffs are taxes on goods imported into the country, typically paid by the entity or person who imports the product.
Carter’s said Monday it estimates the pretax earnings impact of additional tariffs to be about $200 million to $250 million per year. The four top countries of origin for its products are Vietnam, Cambodia, Bangladesh and India, which now have import duties that range from 19% to 50%, according to the Tax Foundation.
Carter’s said in the release it plans to partially offset these costs “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.”
In 2024, the company said it had paid about $110 million in duties on imported products.
On Monday, Carter’s reported net sales of $757.8 million in third quarter, down 0.1% from the same period in 2024. Its net income was $11.6 million, down from $58.3 million a year ago.
“Our team is acting decisively to improve the company’s financial performance,” Palladini said in the news release. “We are pursuing several initiatives, including closing low-margin retail stores, right-sizing our organization and honing product choices.”
Carter’s expects the workforce reduction to save about $35 million a year, beginning in 2026. The company also said it is targeting more than $10 million in spending reductions across a number of categories, with those savings also to start next year.
Carter’s has its Atlanta headquarters at Phipps Tower, an office building at the upscale Phipps Plaza mall in Buckhead.
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