Tandy Brands trades higher after hiring chief restructuring officer
Shares of Tandy Brands Accessories jumped 10 percent today, to 54 cents a share, after disclosing on Friday that it has violated a covenant with a senior lender and hired a chief restructuring officer to help secure new capital.
The manufacturer of belt, wallets and other leather accessories for retailers including Walmart and J.C. Penney said Friday that it "violated the fixed charge coverage covenant" due to disappointing performance in its gifts segment in December. The company said "the profit miss was driven by a highly promotional retail environment, while drove higher than expected sales allowances and higher returns of unsold inventories."
While Tandy Brands says it remains in compliance with the liquidity covenants of its loan, "we believe outside capital is necessary in the near term to solidify our balance sheet." So it has hired John Little, with Deloitte Financial Advisory Services, as chief restructuring officer to help.
Rod McGeachy, president and chief executive, said Tandy Brands fully expects to resolve the covenant breach issue with its lender. He said the company plans to file quarterly results for the period ended Dec. 31 by April 22, and that it expects to incur "material inventory writedown charges."
Tandy Brands, which was based in Arlington for many years. moved its corporate headquarters to Dallas in 2010.
-- Steve Kaskovich