DALLAS (AP) -- Tandy Brands Accessories Inc., which makes belts and leather goods, on Friday said it violated a covenant on one of its loans, and it named a restructuring officer as it struggles to stay afloat.
Tandy, based in Dallas, makes men's, women's and children's accessories; including belts, gifts and bags sold under a variety of national and private brand names.
The company said it violated a fixed-charge covenant in its credit agreement with its senior lender in December after disappointing holiday sales. CEO Rod McGeachy said gross sales targets were met, but profit suffered due to higher than expected markdowns and returns of unsold inventory. It is still in compliance with liquidity covenants and is in negotiations with the lender.
Tandy is now seeking more capital for its business. To help with that and other restructuring moves, the company has retained John Little, a turnaround expert from Deloitte Financial Advisory Services LLP, who will consult with Tandy as its interim chief restructuring officer.
The company said last month that Nasdaq warned it is not in compliance with listing requirements because it didn't file its quarterly report on time for the period ended Dec. 31. It plans to file that report by April 22.
Tandy Brands shares rose 3 cents, or 6.5 percent, to 49 cents in afternoon trading.