Children’s retailer Carter’s, parent of OshKosh B’gosh, is shuttering 150 underperforming stores and laying off 300 employees as a result of tariffs impacting its bottom line.

U.S. retail demand is up, but so are the costs of tariffs — to the tune of nearly $250M, CEO and President Douglas Palladini told CoStar.

Carter’s net income amounted to $11.6M in the third quarter, a stark drop from $58.3M at the same time last year.

The retailer expects $200M to $250M in additional costs due to tariffs imposed by the Trump administration. During fiscal year 2024, imports cost it $110M, Carter's executives said on an earnings call.

Carter's is taking measures to offset costs, including closing stores, laying off corporate employees, raising prices, changing product offerings, sharing costs with vendors and shifting import percentages from other countries.

Over the next three years, Carter's is cutting its 1,000-store footprint by letting leases expire on 150 low-performing stores across the U.S., Canada and Mexico. One hundred will shutter during the 2025 and 2026 fiscal years.

The company will reduce its corporate workforce by 15% by the end of the year, which it said will save it $35M.

About 75% of Carter's product sourcing spend this fiscal year is estimated to come from Bangladesh, Cambodia, Vietnam and India. China will represent less than 3%.

The Trump administration has been on a roller coaster with enacting tariffs, especially on Chinese imports. The effect has sent the retail sector on its own wild ride.

Tariffs on Chinese products are 57%, but that could change with a potential additional 100% levy starting Nov. 1. In the spring, 145% tariffs were put in place, but that was lowered temporarily to 30% during the summer. Even that is a steep increase from the 10% charge on Chinese imports that was initially announced in February, four months into the 2025 fiscal year.

How retailers are handling the increased costs is a mixed bag. Some, like Walmart, are shuttering locations or raising prices to offset the costs. Others, like furniture brand At Home, are closing altogether, citing tariffs as the final nail in the coffin. There are some retailers like Uniqlo and Levi’s that are thriving despite the shifts and plan to open more stores as their sales grow.