Tandy Leather Factory Inc (NASDAQ: TLF)

Tandy Leather Factory, Inc. is a specialty retailer that focuses on leather and leathercraft related products. The company operates 101 retail stores, with 91 located in the United States, 9 in Canada and 1 in Spain, and maintains an average store size of approximately 3,500 square feet, while its new Fort Worth flagship store spans about 8,000 square feet. It offers a broad selection of hides, hand tools, hardware, kits, liquids, machines and supplies to hobbyists, educational institutions, small businesses and affinity groups.

Tandy Leather Factory, Inc. generates revenue primarily through its network of company leased retail stores, its global e commerce websites and its commercial division. In stores and online customers purchase leather, tools, hardware, kits, liquids, machines and supplies, while the commercial division provides production services such as cutting, splitting and assembly for business clients. The company also runs a loyalty program that enables customers to buy online and pick up in store, and it manufactures approximately 10% of its product assortment in its Texas based production facility. Inventory is distributed from a central distribution center in Benbrook, Texas, which supplies the majority of store replenishment and fulfills most web orders.

The company operates through the following segments.

• Retail: This segment encompasses the company's 101 brick and mortar stores and its e commerce platform, offering a wide variety of leather, tools, hardware, kits, liquids, machines and supplies directly to hobbyists, schools, camps, small businesses and affinity groups such as military and first responders. In addition, the retail segment provides in store classes, open workbenches and expert advice from staff who are often practicing leathercrafters, creating a community hub for enthusiasts.

• Commercial: This segment serves business customers that purchase large volumes of leather and related materials, providing them with production services including cutting, splitting and assembly, as well as wholesale pricing and customized product development. The commercial division also offers volume based pricing, direct from warehouse shipping and tailored solutions for manufacturers, designers and small businesses that use leather in their products.

Tandy Leather Factory, Inc. holds a leading position as one of the world's largest specialty retailers of leather and leathercraft related goods, competing against independent brick and mortar shops, online marketplaces such as Amazon and eBay, national craft chains including Michaels Stores, Inc. and Hobby Lobby Stores, Inc., wholesale distributors and mid sized rivals like Weaver Leather and Springfield Leather. The company differentiates itself through its extensive retail footprint, strong brand equity built over more than a century, a deep product assortment, knowledgeable store staff, high touch customer service and the ability to offer both retail and production services under one roof. These strengths are reinforced by the company's long standing relationships with suppliers, its ability to source leather globally and its focus on product innovation driven by customer feedback and market trends.

Tandy Leather Factory, Inc. serves a diverse customer base that includes individual hobbyists, educational institutions such as schools and camps, small businesses, affinity groups like military and first responder organizations, and commercial clients that spend over 20,000 annually on leather and leathercraft related products. The company's retail locations in the United States, Canada and Spain, together with its worldwide e commerce presence, allow it to serve individual consumers and business clients across North America and Europe.