Tandy Leather factory revises plans for new stores
Tandy Leather Factory has reported that sales for the month of August were $4.0 million compared to $4.4 million in August 2007, down 9%. Year to date sales are down 4% to $35.4 million in the current year from $36.8 million last year. Tandy's UK store, which opened in mid-February, reported August sales of $119,000 and $444,000 year-to-date.
Retail stores posted a 6% sales decline for August, with sales totaling $1.9 million compared to $2.0 million in August 2007. The 70 comparable stores posted an 8% same store sales loss for the month. The two stores opened in or after August 2007 added sales for the month of $41,000. Year-to-date sales for retail are $16.4 million this year, a 2% increase over year-to-date 2007 sales of $16.1 million. As of the end of August, same store sales were down 3% for the year.
Wholesale operations posted sales of $1.9 million for August, down 18%
from August 2007 sales of $2.4 million. Within the Wholesale division,
sales were down 18% for the month. For the year to date, wholesale sales are $18.0 million compared to $19.9 million in 2007,
a loss of 10%.
Chief executive officer, Ron Morgan, commented: “Sales are getting tough to predict and even tougher to get as evidenced by our August sales. When the consumer is spending his tax rebate check on gas and groceries, I think that speaks volumes about how difficult the current environment really is. The only bright spot this month is our UK store, reporting monthly sales over $100,000 for the first time. Our Canada stores, having outperformed our US stores in previous months, seem to have finally been affected by the slowing economy there. We will continue to generate new sales ideas and stronger offers to attract customers. However, given the economic outlook forecast for the remainder of the year and into 2009, we are not expecting much of a rebound in sales. As a result, we are lowering our 2008 guidance accordingly.”
Shannon Greene, Chief financial officer and treasurer, stated: “In conjunction with adjusting revenue and earnings guidance, we are only going to open two retail stores domestically in 2008, instead of 4–6 as originally announced. There are two reasons for the change in the number of store openings in the US: the challenging retail environment and our manager trainees need more time to develop. The last thing we need right now is new stores struggling for sales being run by inexperienced managers. That recipe guarantees poor performing stores, which doesn't make good sense.”
Ms Greene continued: “Cash continues to be our strong suit. We have approximately $10 million at the end of August which is one-third of our current market cap. So despite the difficult sales environment, we believe we have strongly positioned ourselves to get through this business cycle, unlike a lot of other retailers who find themselves facing bankruptcy. While we get accused of being too conservative at times, I believe hindsight will prove we are making the right decisions for now.”
