In July 2017

Retailers wake up every morning wondering if any customers will show up that day, famed department-store magnate John Belk often said — and that was before Amazon spurred massive online ordering. Cato, a women’s apparel chain owned by another Charlotte family, is experiencing that truth. CEO John Cato blames “merchandise assortment missteps” — jargon for carrying clothing that many shoppers don’t want to buy — for causing a 17% sales decline in the first quarter of 2017 and a 5% decline last year. Shares of the company have slid more than 50% since peaking at $40 in February 2015.

To be sure, Cato is no Sears, whose massive debt load is forcing a restructuring. Operating 1,373 stores in 33 states, Cato has $230 million in cash and no debt, has bought back 10% of its shares in the last three years, and pays a dividend topping more than 7%. “The good news is we have identified these issues related to our merchandise assortment and design and are taking corrective actions that will put us back on track,” the CEO said at the company’s annual meeting in May. He listed other factors hurting Cato, including online competition, reduced shopping-center development and consumers’ shifting desires to spend money on “experiences” instead of apparel.

Ups and downs are old hat at Cato. John Cato’s grandfather, Wayland Cato Sr., started the chain in 1946, and much of its growth occurred after his father, Wayland Jr., became president in 1960. The company went public in 1968, but the family took it private in 1980. With profits improving, the company again sold shares to the public in 1987 and grew rapidly by opening stores, many near Walmart locations. Earnings peaked at $68 million in 2015 but fell 30% last year.

Cato faces other nonfinancial pressures. The Thirty Percent Coalition, an activist shareholder group, earlier this year criticized the lack of diversity on Cato’s board: All seven directors are white men with no new members added since 2011. Veteran board members “provide stability and insight into our specific niche,” according to a company statement. The makeup probably won’t change without John Cato’s approval: He owns 43% voting control of the company.


CHARLOTTE — AvidXchange raised $300 million and announced a partnership with MasterCard to provide accounts-payable and payment-automation services to small and midsize businesses. Investors included MasterCard, Canadian institutional investor Caisse de dépôt et placement du Québec and PayPal co-founder Peter Thiel.

CHARLOTTE — Peak 10 will pay nearly $1.7 billion for Denver-based ViaWest, a data-center firm that is a subsidiary of Canada-based Shaw Communications. Data-center operator Peak 10 was acquired by San Francisco-based private-equity firm GI Partners in 2014.

MONROE — Consolidated Metco will build a $40 million, 253,000-square-foot plant, making truck hubs and brake rotors for regional Freightliner plants. The Vancouver, Wash.-based company will add 100 jobs; it currently employs 500 at a local plant.

MORRESVILLE — Lowe’s will acquire Maintenance Supply Headquarters for $512 million. The Houston-based construction-products company operates 13 distribution centers. The deal is expected to close in the second fiscal quarter. Lowe’s also laid off 125 information-technology workers at its local headquarters, moving many of the jobs to Bangalore, India.

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