Tandy Leather Factory, Inc. Reports September Sales Down 4% Against September 2007

October 9, 2008 10:15 AM EDT

FORT WORTH, TEXAS--(BUSINESS WIRE)--

Tandy Leather Factory, Inc. (AMEX: TLF) reported today that sales for the month of September were $4.0 million, down 4% from September 2007 sales of $4.2 million. Year-to-date sales are down 4% at $39.4 million in the current year from $40.9 million last year. Tandy's new UK store, which opened in mid-February, reported September sales of $115,000 and $560,000 year-to-date.

Retail Leathercraft posted a 1% sales decline for September, with sales totaling $1.9 million, down $22,000 from September 2007 sales. The 70 comparable stores posted a 4% same store sales loss for the month. The 3 stores opened in or after September 2007 added sales for the month of $59,000. Year-to-date sales for Retail Leathercraft are $18.3 million this year, a 2% increase over year-to-date 2007 sales of $18.0 million. As of the end of September, same store sales were down 3% for the year.

Wholesale Leathercraft posted sales of $2.0 million for September, down 11% from September 2007 sales of $2.2 million. Within the Wholesale Leathercraft division, the wholesale stores' same store sales were down 11% for the month while the National Account group posted a September sales decline of 7%. For the year to date, Wholesale Leathercraft sales are $19.9 million compared to $22.1 million in 2007, a loss of 10%. The comparable wholesale stores posted a 10% sales decline for the year, while National Accounts reported a 6% sales loss. Mid-Continent's year-to-date sales were $434,000, down 22% from the same period in 2007.

Chief Executive Officer, Ron Morgan, commented, "With the continued instability in the economy, we, like many of the other retailers out there, could not convince customers to spend their money with us as evidenced by our September sales. However, we are confident in the underlying strength of our business as we believe our weak sales are not a reflection of our product offerings and customer interest, but simply a by-product of the overall economic environment. We will continue to manage our business conservatively with tight expense control in order to not only survive but to be successful during this difficult business cycle. Finally, while we recognize that wholesale side of our business is showing the greatest weakness right now, if there is a silver lining there, it is that it will become a smaller contributor to our sales as our Retail Leathercraft division continues to grow and expand in the number of stores."

Shannon Greene, Chief Financial Officer and Treasurer, added, "While our sales aren't where we want them, our cash continues its positive trend. We increased our cash position during the third quarter to more than $10 million, which is remarkable considering that our third quarter historically uses cash. We are maintaining a tight control of inventory and operating expenses given that we are expecting a challenging Christmas sales season. Third quarter sales were down 4% compared to the third quarter of 2007. Retail Leathercraft's sales were flat for the quarter, while Wholesale Leathercraft's sales were down 14%. The retail same store sales were down 3% for the quarter."

Tandy Leather Factory, Inc., (http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. The Company distributes its products through its 29 Leather Factory stores, located in 19 states and 3 Canadian provinces, 72 Tandy Leather retail stores, located in 35 states and 5 Canadian provinces, one combination wholesale/retail store located in the United Kingdom, and Mid-Continent Leather Sales, one store located in Oklahoma. Its common stock trades on the American Stock Exchange with the symbol "TLF". To be included on Tandy Leather Factory's email distribution list, go to http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.

This news release may contain forward-looking statements. All forward-looking statements made here or in other news releases issued by Tandy Leather Factory, Inc. are based on current expectations as of the date of the release. These forward-looking statements involve risks and uncertainties that could cause the results of Tandy Leather Factory, Inc. to differ materially from management's current expectations. Many of these risks and uncertainties are detailed from time to time in TLF's reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q. Investors are reminded that past performance may not be predictive of future results.

Source: Tandy Leather Factory, Inc.

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