John Cato Named Chief Executive Officer of the Cato Corporation

CHARLOTTE, N.C., May 20 /PRNewswire/ -- John P. Derham Cato, who has served as Vice Chairman of the Board and Chief Operating Officer of The Cato Corporation (Nasdaq: CACOA) since 1996 and as President since 1997, today was named Chief Executive Officer. The announcement was made at the Annual Meeting of the Shareholders' of The Cato Corporation, a leading value retailer of women's apparel and accessories.

The position of Chief Executive Officer has been held for many years by John's father, Wayland H. Cato, Jr., who will continue to serve as Chairman of the Board. Wayland H. Cato, Jr. co-founded the Company in 1946 with his father, Wayland H. Cato, Sr., and his brother, Edgar T. Cato.

"Over the past two and a half years, John spearheaded a major strategic and financial turnaround at The Cato Corporation which produced nine consecutive quarters of earnings increases and earnings per share last year that matched our previous record set in 1993," said Chairman Wayland H. Cato, Jr. "His proven experience in every aspect of our retail business, his ability to bring in new seasoned senior management where appropriate and his skill at working effectively with all associates have led to a refocus at Cato on the way we do business and the needs of our customers. I am confident that John will continue to provide the leadership that will further the Company's growth and profitability."

"As President and Chief Operating Officer, John conceptualized and implemented a number of strategic and tactical changes within the corporation, including upgrading of the quality, fit and fashion content of our merchandise, improving merchandise inventory management, adopting a new every day low pricing policy, eliminating unprofitable promotions and streamlining store operations."

"Prior to his promotion to Chief Operating Officer in 1996, John Cato served as President and General Manager of Cato's off-price division, "It's Fashion!." He was responsible for turning around that division during the early 1990s."

"I've been in retail for over 20 years," said John Cato, "so I feel as at home in our stores, in the New York apparel market and in manufacturing facilities around the world as I do in the corporate office. There's no substitute for being where the action is and listening. I like to watch firsthand as our customers examine our merchandise. They say they want fashion and quality at great prices -- and we're making sure that's what they get. This is a strategy that is yielding strong returns for our customers and for our shareholders. And the best part is, there is plenty more for us to do."

The Cato Corporation's 1998 net income was $23.9 million or $0.85 per share, compared to $17.4 million or $0.62 per share for 1997, an increase of 37%. The Cato Corporation operates more than 750 stores in 21 states principally in the Southeast, under the names Cato, Cato Fashions, Cato Plus and It's Fashion!