Tandy Leather Factory, Inc. operates as the largest specialty retailer of leather and leathercraft-related items.
The company sells its products primarily through company-owned stores and through orders generated from its global websites, and through direct account representatives in its commercial division. The company produces leather lace, cut leather pieces and most of the do-it-yourself kits that are sold in its stores and on its websites. The company also offers production services to its...
Tandy Leather Factory, Inc. operates as the largest specialty retailer of leather and leathercraft-related items.
The company sells its products primarily through company-owned stores and through orders generated from its global websites, and through direct account representatives in its commercial division. The company produces leather lace, cut leather pieces and most of the do-it-yourself kits that are sold in its stores and on its websites. The company also offers production services to its business customers such as cutting (clicking) and splitting and some assembly.
Business Strategy
The company’s stores have been, and continue to be, its competitive advantage: where its consumers learn the craft in classes, open table, and from the expertise of its store staff, where they can touch, feel, and test the product, and where they can connect and commune with others passionate about leather. The company’s websites provide inspiration, detailed product descriptions and specifications, educational information and videos, and a convenient place to also purchase product – especially for those who are far from its retail stores, including a growing international customer base. For many of its retail and web customers, leatherworking evolves from a passion to a trade. The company’s commercial division is tailored to the needs of those customers who build businesses around leather. With dedicated direct account representatives, a direct-from-its-warehouse shipping model, volume-based competitive pricing, customized product development, assembly and pre-assembly services, the company is building long-term, strategic relationships with its largest customers. The company focuses on strengthening its sales by leveraging its competitive advantage of its retail stores.
Merchandise
The company carries a wide assortment of products organized into a number of categories including leather, hand tools, hardware, kits, liquids, machines, and other supplies. The company operates a production facility in Fort Worth, Texas, where it produces kits, thread lace, belt strips and straps, and Craftaid tooling templates, and provide some custom production services for commercial and business customers. The factory produces approximately 10% of the company’s products. The company distributes product under the Tandy Leather, Eco-Flo, Craftool, CraftoolPro and Dr. Jackson’s brands, along with its premium TandyPro line of products. The company develops and invests in new products through the ideas and referrals of customers and store personnel, as well as the analysis of trends in the market and sales performance at retail. In addition, the company has been focused on broadening its assortment through strategic partnerships with key brands to drive category growth and better meet the needs of its customers.
Operations
The company’s stores offer a broad selection of products combined with leathercraft expertise in a one-stop shop. Not only can customers purchase leather, related accessories and supplies necessary to complete their projects from a single source, but many of its store associates are also leathercrafters themselves and can provide suggestions and advice on the company’s customers’ projects. Customers value the expertise and high level of customer service from the company’s store associates, the convenience of taking their purchases immediately, as well as the ability to touch, feel and choose their individual pieces of leather, an organic product in which each piece is unique. The company also offers open workbenches where customers can work on projects together with the leathercrafting community, and test new tools and techniques.
Most of the company’s stores range in size from 1,300 square feet to 9,000 square feet, with the average at approximately 3,500 square feet. The company’s Fort Worth flagship store is approximately 22,000 square feet. Stores are located in light industrial warehouse spaces or older strip shopping centers in proximity to major freeways or well-known crossroads.
Historically, the company generates slightly more sales in the fourth quarter of each year due to the holiday shopping season (approximately 28-30% of annual sales), while the other three quarters average approximately 22-24% of annual sales each quarter.
Customers
The company’s customers fall into two broad categories: those who shop in retail stores and on its website (Retail Customers) and those whom it serves through its commercial division (Commercial Customers). Retail Customers range from hobbyists to institutions (schools, camps, and other groups) to small businesses. Affinity groups like Military and First Responders and smaller and larger businesses who purchase in the company’s retail stores receive special pricing or general discounts. To be served through its commercial division, customers generally need to spend more than $20,000.
Distribution
The company’s stores receive the majority of their inventory from its central distribution center located in Fort Worth, Texas, in weekly or, increasingly, bi-monthly shipments, using third-party transportation providers.
The company fulfills all of it’s the U.S. and many of its international web orders from its Fort Worth distribution center. Canada web orders are fulfilled out of the company’s Canada stores, and European web orders are fulfilled out of its Spain store. The company has a global customer service team that handles web order inquiries and phone orders. The company generally maintains higher inventories of imported or long-lead-time items to ensure a continuous supply. The company has been executing a number of strategic initiatives to test smaller quantities of new items online, buying into them only when it is certain of their success, to tailor product assortments to the needs of local customers in each store, and to ship directly from vendors to customers. The company carries about 6,500 stock-keeping units (SKUs) in its product line and continue to refine both the line, the lead times and safety stock levels required to meet customer demand, online vs. in-store assortment, and overall total inventory levels needed to grow sales and market share.
Competition
The company’s competitors include smaller, independently-owned brick-and-mortar retailers, internet-based retailers including those selling on platforms like Amazon and eBay, national craft chains like Michaels Stores, Inc. and Hobby Lobby Stores, Inc., some wholesale-focused distributors, and two mid-sized competitors – Weaver Leather and Springfield Leather – who have one store and an online business.
Seasonality
Historically, the company generates slightly more sales in the fourth quarter of each year due to the holiday shopping season (approximately 28-30% of annual sales), while the other three quarters average approximately 22-24% of annual sales each quarter (year ended December 31, 2023).
Suppliers
The company purchases merchandise and raw materials from nearly 150 suppliers from the United States and approximately 20 foreign countries.
Intellectual Property
The company owns all the material trademark rights used in connection with the production, marketing, distribution and sale of all Tandy-branded products. In addition, the company licenses a limited number of its trademarks and copyrights used in connection with the production, marketing and distribution of certain categories of goods and limited edition co-branded projects. Major trademarks include federal trade name registrations for Tandy Leather Factory, Tandy Leather Company, and Tandy. In addition, Tandy owns several patents for specific belt buckles and leather-working equipment. Tandy polices its trademarks and trade dress and where appropriate pursues infringers.
History
The company was founded in 1919. The company was incorporated in 1994. It was formerly known as Midas Leathercraft Tool Company and changed its name to The Leather Factory, Inc. in 1993. Further, the company changed its name to Tandy Leather Factory, Inc. in 2005.
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