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Page 34

Exhibit 99.1

(CATO CORPORATION LOGO)

|                                                                                              |  |             
|--------------------------------------------------------------------------------------------- |  | ------------
|                                                                                              |  | NEWS RELEASE
|                                                                                             
|FOR IMMEDIATE RELEASE                                                                         |  |             
|                                                                                              |  | CEO Approval
|For Further Information Contact:                                                              |  |             
|Michael O. Moore
     Executive Vice President
     Chief Financial Officer
     704-551-7201 |  |             

CATO ANNOUNCES RETIREMENT AGREEMENTS WITH COMPANY
FOUNDERS

Charlotte, N.C. (September 3, 2003)  The Cato Corporation (NYSE: CTR)
announced today that the Company has entered into agreements with Mr. Wayland
H. Cato, Jr., a Company founder and Chairman of the Board and Mr. Edgar T.
Cato, a Company founder and a member of the Board of Directors. The agreements
provide for the retirement of Mr. Wayland Cato and Mr. Edgar Cato from the
Company and the Board of Directors effective January 31, 2004. Mr. Wayland
Cato will be available to the Company for consulting services following his
retirement.

In the third quarter, the Company expects to take a charge of approximately
$2.8 million representing the present value of certain payments and benefits to
Mr. Wayland Cato and Mr. Edgar Cato under the terms of the agreements. The
charge will be approximately $1.8 million on an after-tax basis, or $.08 per
diluted share for the third quarter and year. The benefits include
compensation for three years commencing on the retirement date, life insurance
coverage for three years, continuation of medical insurance coverage, and
assistance with the relocation of their offices and are in consideration of
the consulting services, non-competition covenants and confidentiality
covenants, among other obligations of the retirees.

The retirement agreements were negotiated by the Compensation Committee of the
Board of Directors and
approved by the independent directors on the Companys Board.



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Page 35

Exhibit 99.1

The Cato Corporation is a leading specialty retailer of value-priced womens
fashion apparel operating two divisions, Cato and Its Fashion!. The
Company primarily offers exclusive merchandise with fashion and quality
comparable to mall specialty stores at low prices, every
day. As of August 30, 2003, The Cato Corporation operated 1,063 stores in 26
states. Additional information on The Cato Corporation is available at
www.catocorp.com.

Statements in this press release not historical in nature, including
specifically the Companys expectations regarding the amount of the charge it
expects to take in the third quarter as a result of the retirement agreements
described above, are considered forward-looking within the meaning of The
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on current expectations that are subject to known and
unknown risks, uncertainties and other factors that could cause actual results
to differ materially from those contemplated by the forward-looking statements.
Such factors include, but are not limited to, the following: judgments
regarding the ultimate valuation of, and accounting treatment accorded to, the
benefits to be provided pursuant to the retirement agreements described above,
general economic conditions; competitive factors and pricing pressures; the
Companys ability to predict fashion trends; consumer apparel buying patterns;
adverse weather conditions and inventory
risks due to shifts in market demand. The Company does not undertake to
publicly update or revise the forward-looking statements even if experience or
future changes make it clear that the projected results expressed or implied
therein will not be realized. The Company is not responsible for any changes
made to this press release by wire or Internet services.

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