SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: January 13, 1999
Date of Earliest Event Reported: January 8, 1999
TANDYCRAFTS, INC.
A DELAWARE CORPORATION
1-7258 75-1475224
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(Commission File Number) (IRS Employer Identification No.)
1400 Everman Parkway
Fort Worth, Texas 76140
(817) 551-9600
ITEM 5. OTHER EVENTS
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(a) On January 8, 1999, Registrant issued a press release announcing
plans to close its leather and crafts retail stores and related
manufacturing operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits.
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Exhibit
Number Description
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99 Copy of press release announcing plans to close
its leather and crafts retail stores and related
manufacturing operations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
TANDYCRAFTS, INC.
Date: January 13, 1999 By:/s/ Michael J. Walsh
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Michael J. Walsh
President
Date: January 13, 1999 By:/s/ James D. Allen
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James D. Allen
Chief Financial Officer
FOR IMMEDIATE RELEASE
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TANDYCRAFTS ANNOUNCES PLAN TO CLOSE
LEATHER AND CRAFTS RETAIL STORES
EXPECTS NON-RECURRING PRE-TAX CHARGE OF
APPROXIMATELY $25 - $29 MILLION DURING FISCAL 1999
FORT WORTH, Texas - January 8, 1999 - Tandycrafts, Inc. (NYSE:TAC) today
announced its board of directors approved a plan to close its leather and crafts
retail stores and related manufacturing operations as part of the Company's
continuing effort to focus on its most profitable and growing businesses.
Tandycrafts, the Fort Worth, Texas-based manufacturer, wholesaler and retailer
of consumer products, said it plans to close its leather and crafts
manufacturing operations and 121 retail stores over the next six months. As a
result, Tandycrafts will take a total pre-tax charge of approximately $25 - $29
million in the fiscal year ending June 30, 1999. Approximately $12 million of
this pre-tax charge will be reflected in the fiscal second quarter, which ended
December 31, 1998.
Tandycrafts cited continuing poor performance and declining sales in its
decision to close the bulk of its leather and crafts operations. Tandycrafts
said it will retain its profitable mail order, dealer and wholesale leather and
crafts business, while enhancing its Internet site to more efficiently sell
these products direct to consumers. This move complements Tandycrafts' focus on
growing its most profitable business segment, the Frames and Wall Decor
division, while continuing its efforts to improve the Office Supplies and
Novelties and Promotions divisions.
"The decision to exit the leather and crafts retail business reflects our
continuing strategic focus on operations that offer long-term growth and profit
potential," said Michael J. Walsh, Tandycrafts president and chief executive
officer. "Leathercrafting is a mature business niche, and our recent efforts to
reenergize the retail stores with new products, new merchandising concepts and
new store formats had little impact on improving the performance of the
division. The restructuring will eliminate a source of on-going losses."
R. Earl Cox III, Tandycrafts chairman of the board, said: "After an intensive
evaluation of the Company's core competencies, the board concluded that the best
strategy for maximizing shareholder value is to close the leather and craft
retail stores and related manufacturing activities. We will redirect our
efforts toward the more profitable wholesale and direct sales channels."
"Tandycrafts will continue to evaluate all our operations to ensure they fit our
profit criteria, are competing in a growing market, and follow our focus on
becoming a consumer products-driven company," said Walsh.
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TANDYCRAFTS/PAGE 2
Tandycrafts further announced that it now appears probable that the Company will
be required to perform under a bank guaranty related to its January 1997 sale of
Cargo Furniture and Accents. As a result, the Company expects to record an
additional pre-tax charge of $3.5 million in the quarter ended December 31,
1998.
Tandycrafts, Inc. manufactures, distributes and/or retails products through four
distinct product-related divisions: Frames and Wall Decor, Leather and Crafts,
Office Supplies, and Novelties and Promotional. Its products are marketed and
sold through various channels, including direct-to-consumer (e.g., retail
stores, mail order, the Internet) and wholesale distribution (e.g., direct sales
force, telemarketing, outside sales representatives). The Company is
headquartered in Fort Worth, Texas and its common stock is listed on the New
York Stock Exchange under the ticker symbol "TAC".
This press release includes statements that may constitute "forward-
looking" statements, usually containing the words "believe", "estimate",
"project", "expect" or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Factors that would cause or contribute to such
differences include, but are not limited to, continued acceptance of the
Company's products in the marketplace, competitive factors, dependence upon
third-party vendors, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission. By making these
forward-looking statements, the Company undertakes no obligation to update
these statements for revisions or changes after the date of this release.
For further information, please contact:
At the Company: James Allen, Chief Financial Officer (817) 551-9600
Investor Relations: R. Jerry Falkner, CFA (800) 377-9893
Media: Jeff Lambert or Paula MacKenzie, Lambert, Edwards & Associates, Inc.
(616) 365-2000
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