Tandy Leather Factory Achieves Sales Gain for 2007.

FORT WORTH, Texas -- Tandy Leather Factory, Inc. (AMEX: TLF) reported today that it finished the year with a 1% sales gain over 2006. 2007 sales totaled $55.7 million compared to $55.2 million last year. Retail Leathercraft ended 2007 with a 10% sales gain, reporting annual sales of $24.8 million compared to 2006 sales of $22.5 million. The 52 same stores achieved a minimal sales gain for the year. The 20 new stores contributed 2007 sales of almost $4 million. Wholesale Leathercraft ended 2007 with a 3% sales decline. 2007 sales totaled $29.7 million, down $1 million from 2006 sales of $30.7 million. The wholesale stores' same store sales for 2007 were down 4% compared to 2006 and National Accounts ended the year with a 15% loss. Mid-Continent Leather Sales added $720,000 in sales for the year.

Chief Executive Officer and President, Ron Morgan, commented, "We ended the year with a sales gain, albeit a minimal one. That is certainly better than the alternative. Looking ahead, given the economic environment, positive financial reports will be the result of expense control, not sales gains. We have been successful in our efforts to reduce our inventory as it decreased $1.5 million through the first 60 days of the quarter and I expect another $1 million decrease in December. Cash at year-end approximately $6.5 million, up $3 million since September 30. We will continue our expense cutting efforts as our goal for 2008 is to maintain or increase profits on little or no sales growth.

Sales for the month of December were $4.9 million, down 5% from December 2006 sales of $5.2 million. Sales for December for the retail division were down 4.3% to $2.4 million compared to December sales last year of $2.6 million. The 62 comparable stores posted a 12% same store sales decline for the month. The 10 stores opened after November 2006 added sales for the month of $194,000. Sales for the month for the wholesale division were $2.4 million, down 4% or $90,000 from $2.5 million in December 2006. The wholesale stores reported an 8% same store sales loss while the National Account group posted a December sales gain of 30%. Mid-Continent Leather Sales added sales of $52,000 for the month.

Consolidated sales for the fourth quarter were flat against fourth quarter sales in 2006. Retail Leathercraft produced a 3% gain for the quarter, although the same stores reported a 5% same store sales loss. Wholesale Leathercraft reported a 2% loss for the quarter, with the same stores down 5% and National Accounts up 2%.

Shannon L. Greene, Chief Financial Officer and Treasurer, commented, "Our December sales were weak, but frankly not surprising. The retail sector is struggling and as a result, I don't think anyone is expecting record sales this holiday season. Traffic in our stores was not as strong as we've seen in years past for December. We are fortunate that our sales are spread pretty evenly throughout the year and we are not relying on the fourth quarter to generate a large portion of our annual sales like many other retailers."

Ms. Greene continued, "We are looking ahead to a better year in 2008 with tighter expense control as we do not expect sales to grow significantly. We are on schedule with our UK expansion plans and are still looking at a February opening date. We are encouraged by the inquiries we receive from potential customers who are anxious for us to open for business there."

Tandy Leather Factory, Inc., (http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. The Company distributes its products through its 29 Leather Factory stores, located in 19 states and 3 Canadian provinces, 72 Tandy Leather retail stores, located in 32 states and 6 Canadian provinces, and Mid-Continent Leather Sales, one store located in Oklahoma. Its common stock trades on the American Stock Exchange with the symbol "TLF".

This news release may contain forward-looking statements. All forward-looking statements made here or in other news releases issued by Tandy Leather Factory, Inc. are based on current expectations as of the date of the release. These forward-looking statements involve risks and uncertainties that could cause the results of Tandy Leather Factory, Inc. to differ materially from management's current expectations. Many of these risks and uncertainties are detailed from time to time in TLF's reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q. Investors are reminded that past performance may not be predictive of future results.