Carter's, the children's clothing retailer that also the popular OshKosh B’gosh brand, will be closing 150 stores and cutting 300 jobs over the next three years.

Carter's announced plans to shutter "low-margin" stores in its fiscal third-quarter report and during a call on Oct. 27, saying that roughly 100 of the stores will be shuttered by 2026. The brand also suspended new openings of U.S. locations that use its current store model, along with plans to reduce its product offerings by 20-30%.

Tariffs were cited as one of the largest drivers of lower margins and increased costs throughout the company's call, with Executive Vice President and CFO Richard Westenberger saying the brand is continuing to monitor tariff levels and the "considerable impact they have begun to have on our business."

"As we all know now, over the past number of months, significantly higher tariffs have been implemented affecting imports from most every country, including those from which we source the majority of our products," he said.

Carter's to save $35 million annually after job cuts, CEO says

Current estimates for the net impact of higher tariffs on fourth quarter earnings are in the range of $25 million to $35 million, he said. This cut into gross margins by $20 million in Q3 of 2025, and is expected to grow to a $40 million gross impact in Q4.

Most of the 150 stores slated for closure will shut down as their leases expire, Westenberger said. The brand will also reduce its office-based roles by 15%, equating to about 300 jobs, said CEO Douglas Palladini, which is expected to result in $35 million in savings annually.

"It's crucial that Carter's enhance our performance-driven culture in which fewer people have greater ownership and accountability," said Palladini. "To accomplish this, we plan to reduce office-based roles by approximately 15% between now and year-end 2025....we believe these actions will streamline processes and decision-making at Carter's."

The retailer also decided against offering 2025 sales and earnings guidance due to "ongoing and significant uncertainty regarding tariffs," according to Westenberger.

USA TODAY contacted Carter's on Oct. 28, but has not received a response.

This article originally appeared on USA TODAY: Children's clothing retailer Carter's closing 150 stores, cutting 300 jobs

Reporting by Mary Walrath-Holdridge, USA TODAY / USA TODAY

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