Tandy Leather Factory Inc announced that it intends to open a Tandy Leather Factory store in the United Kingdom in the 1st quarter of 2008. The Company is in the final stages of lease negotiations for a 10,000 square foot building located in Northampton.
John McNiven, President of the Company's Canadian operation, has agreed to oversee the store opening and business development for the first year. This first store will operate as a combination wholesale and retail store. Once it is established and profitable, the Company intends to open several traditional Tandy Leather retail stores throughout the country.
The Company cited several reasons for establishing a local presence in the UK as follows:
• Sales into the UK and Europe by the Company is approximately $600,000 annually, even though the Company doesn't advertise internationally. Management believes that sales could increase significantly with a store located there and an advertising campaign directed toward the population.
• The Company believes the timing is good given that the UK economy is strong and growing. Economic indicators suggest Retail Sales for the third quarter to be 6.2% and GDP, after second quarter growth of 0.8%, is expected to be 3.3% for the third quarter.
• The Company has a highly-qualified employee in John McNiven who has agreed to oversee the UK endeavor. Mr. McNiven has 40+ years of experience in the leathercraft industry and has a proven track record establishing Leather Factory and Tandy Leather retail stores outside of the U.S.
Ron Morgan, CEO and President, commented, "We have spent a lot of time researching the UK market and believe that 2008 is the right time to embark on this endeavor. While our sales internationally are respectable, considering we're not doing anything to develop that business, we believe that a local presence and a dedicated advertising and marketing effort could increase our sales considerably. Assuming we're successful in the UK, we have good reason to believe that Tandy Leather stores could be well received in several other countries as well."
Mr. Morgan continued, "We have spent a year evaluating the potential risk versus the return. Jon Thompson, our Senior Vice President, has spent considerable time in the UK visiting potential and existing customers as well as contacting other US companies doing business in the UK. Jon's assessment of the market and our ability to be successful was influential in our decision to move forward now."
Shannon Greene, CFO and Treasurer, added, "This first store will be larger than a typical Leather Factory store and is expected to maintain approximately $250,000 in inventory because of the transit time to ship merchandise from the U.S. In addition, it will be the central warehouse, so to speak, for the retail stores that we expect to open around the country in the future."
Tandy Leather Factory Inc
