Tandy Leather Factory, Inc. Reports May 2009 Sales Down 6% from May 2008

Business Wire, June 04, 2009

Retail Up 5%; Wholesale Down 19%

FORT WORTH, Texas -- Tandy Leather Factory, Inc. (AMEX: TLF) reported today that sales for the month of May were $4.3 million, down 6% from that of May 2008. Year-to-date sales are down 2% to $22.1 million in the current year from $22.6 million last year.

Retail Leathercraft’s sales rose 5% to $2.1 million compared to May 2008 sales of $2.0 million. The 72 comparable stores’ sales were up 3% for the month compared to the same period last year. The 2 stores opened since May 2008 added May sales of $47,000. Year-to-date sales for Retail Leathercraft are $10.9 million this year, a 5% increase over sales of $10.4 million for the same period of 2008. As of the end of May, the 72 comparable stores’ sales were up 3% compared to sales reported for the same period in 2008.

Wholesale Leathercraft posted sales of $1.9 million for May, down 19% over May 2008 sales of $2.4 million. Within the Wholesale Leathercraft division, the wholesale centers’ sales were down 16% for the month while the National Account group’s sales were down 36% against May 2008. For the year to date, Wholesale Leathercraft sales are $10.3 million compared to $11.7 million in 2008, down 12%.

The UK store, which opened in February 2008 as a combination retail and wholesale store, added sales of $98,000 for the month and $481,000 for the year, compared to $58,000 and $143,000 for the comparable periods in 2008, respectively.

Chief Executive Officer, Ron Morgan, commented, “May is a continuation of the same story – retail is trending positive; wholesale is trending negative. We had one less sales day this month versus May 2008, but based on the average sales per day, we still would have had a sales loss of approximately 3% even if the selling days were equal. We lost approximately 150 basis points on the currency fluctuation of our Canadian and UK sales as well. Regardless, while our retail business is looking pretty good, our wholesale business continues to significantly impact our top line with its trend of sales declines.”

Shannon L. Greene, Chief Financial Officer added, “While it is difficult to make predictions with any degree of certainty in the current economic environment, I am pleased with the improvement in our operating efficiency overall. Despite the lower sales so far this year, we are generating higher profits, due primarily to operating expense reductions. As a result, we feel fairly comfortable in predicting an improvement in earnings this year over last.”

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, 74 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 statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.