Tandy Brands Accessories, Inc., a manufacturer of fashion accessories for men, women and children, announced Monday that it will cease its belt manufacturing operations at the company's Yoakum, Texas facility, resulting in the loss of 165 jobs, and move those operatons offshore.
This move is expected to result in increased cost savings for Tandy in fiscal 2008.
For the third quarter of fiscal 2007, net sales decreased 16.5 percent to $37.9 million compared to $45.4 million for the same period last year. Gross profit margin increased 18.5 percentage points to 35.9 percent compared to 17.4 percent in the prior year period. Tandy reported a net loss of $1.4 million, or $0.21 per diluted share, compared to a net loss of $5.9 million, or $0.89 per diluted share, in the prior year third quarter.
J.S.B. Jenkins, president and CEO commented, "Our results for the third quarter were within expectations with respect to decreased revenues along with improvement to our gross margin. The significant increase to our gross margin was a result of our previously announced exit from several women's accessories categories, which resulted in a charge of $6.9 million in the prior year third quarter, as well as our continued efforts to improve our overall distribution."
The Yoakum facility will be converted into a receiving and distribution facility, with about 355 employees, and most of the belt manufacturing activity will be completed by June 30, 2007.
Accordin to Jenkins, Tandy can no longer maintain its strong competitive advantage with overseas manufacturing as its manufacturing costs have become considerably higher than overseas operations. To continue Tandy's success, they must close the U.S. manufacturing operations in Yoakum and switch to manufacturing offshore, Jenkins said.