Charles David Tandy was the chairman of the board, president, and chief executive officer of the Tandy Corporation. He was born May 15, 1918 and died November 4, 1978. Tandy was involved in the creation or expansion of three retail chains: Tandy Leather, Radio Shack, and Pier 1 Imports.
Early life
Tandy was the second of three children born to Carmen (née McLain) and David Lewis Tandy in Brownsville, Texas, on May 15, 1918. Charles’ youngest brother, Bill, went on to run his own chain of leather craft stores in the early 1950s before merging with Tandy Corporation.
At the age of 10, Charles and a classmate started selling scraps of leather from his father’s store to classmates for spare change, teaching them how to make belts out of them. With another classmate whose father owned a boot company, they started making heavier belts from scraps of boot leather that they sold to department stores.
In 1935 Tandy graduated from Central High School in Fort Worth, Texas.
Charles Tandy’s education and early career
Tandy’s father co-owned the Hinckley-Tandy Leather Company with his friend Norton Hinckley.
After flunking out of Rice Instutute in his freshman year, he graduated from Texas Christian Academy in 1940. While in college, he sold women’s shoes. He attended Harvard Business School but did not graduate. In the spring of 1941, the Navy offered commissions to Harvard Business School students. Tandy applied and was accepted, serving 6 years.
While in the Navy he set a record for selling war bonds. In 1945, he married Gwen Johnston, a wealthy widow 14 years his senior.
While he was in the Navy, he observed patients recovering in Navy hospitals doing leathercraft for therapy and recreation. He wrote a letter to his father suggesting this might be a way to expand Hinckley-Tandy’s business after World War II ended. This led to them setting up a mail order business, Tandycraft, after he left the Navy.
Tandy developed his small family leather business into an international corporation. He first turned it into a leather craft company when shoe rationing in World War II almost killed the business, and later expanded into selling leather and tools to make such products as wallets. Hinckley and Tandy split in 1950, with Hinckley taking the part of the business that sold shoe findings, and Tandy taking the leathercraft business.
Taking Tandy Corporation Public
In 1954, David Tandy suffered a heart attack, exposing a weakness in the corporate structure. Since Tandy was a private company, his death would have forced a liquidation of the company in order to pay the inheritance taxes. They sought a way to take the company public to protect it. The company wasn’t really large enough to conduct a traditional IPO, so instead, they sought to merge with a company that was already listed on the New York Stock Exchange. After shopping around for prospects, Charles Tandy engineered a leveraged buyout of the Tandy Leather Company by the American Hide and Leather Company, based in Boston, in 1955.
The Tandys and their leadership didn’t agree with the direction American Hide and Leather took the company after the merger. A power struggle ensued, resulting in the Tandys, their extended family, and Tandy managers buying as much stock in the company as they could, often using borrowed money. In 1959, they forced a proxy battle to take over the company. As a result, Tandy partisans received five of the nine seats on the board. They quickly divested three unprofitable subsidiaries American Hide and Leather had purchased after merging with Tandy, moved the corporate headquarters to New York to facilitate the divestitures, then moved operations to Fort Worth. In 1960, they changed the name to Tandy Corporation, taking the ticker symbol TAN.
Pier 1 Imports
By 1962, Charles Tandy had concluded he had ambitions bigger than the leather craft business could satisfy.
One of the businesses they looked into was Cost Plus Imports, which sold imported furniture and other goods out of a converted warehouse at near-wholesale prices. A failed public offering left the company in a cash crunch. Charles and Gwen were already planning a vacation to San Francisco in August 1962, so they visited the store as part of the trip. They found a 15,000 square foot store, several times larger than a Tandy store, selling $7-$8 million worth of merchandise per year when a Tandy store might sell $200,000. Tandy called one of his lieutenants, Luther Henderson, to come visit the store.
Tandy bought into the business, acquiring with it the right to operate stores under the Cost Plus name under Henderson’s leadership. But the partnership only lasted three years. Tandy found the business model worked well for one giant store in San Francisco, but needed substantial adjustment to work as a chain throughout the country. In 1965, they parted ways, with the Tandy-backed operation taking the name Pier 1 Imports.
But Henderson and Tandy found the way Tandy operated its leathercraft stores didn’t fit the furniture business, with its longer lead times. In 1966, Tandy sold Pier 1 to Henderson for $1.8 million.
Henderson and Tandy remained friendly, with Tandy even taking a seat on Pier 1’s board. Tandy chided Henderson, asking why they didn’t run the company that way when it was part of Tandy Corporation. The 1992 book Tandy’s Money Machine quoted Henderson as saying Tandy was a good mentor but he didn’t take the time to understand the differences between Pier 1’s and Tandy Leather’s business models. Given more room, Henderson thought the partnership could have worked.
Radio Shack
Charles Tandy saw the electronics business as a natural expansion for Tandy Corporation, another hobby with a similar business model. He approached Lafayette Electronics and Allied Electronics to no avail. So in 1961, he opened an electronics store called Electronics Crafts, soon opening a second and a third.
Meanwhile, in Boston, the same bank that had helped Tandy match up with American Hide and Leather had another creditor who was having trouble meeting its obligations, an electronics store called Radio Shack. The bank had told Tandy about Radio Shack before, when he was talking with Lafayette and Allied. Tandy wasn’t able to work with Milton Deutschmann, the head of Radio Shack, but with the company $7 million in debt and losing $200,000 a month, the bank forced Deutschmann to come to the table. Deutschmann agreed to an audit, and agreed to sell for a $300,000 advance that would give Tandy the right to acquire 62 percent ownership of Radio Shack at book value. Price Waterhouse conducted an audit and concluded its book value was zero, giving Tandy control of Radio Shack for $300,000.
How Charles Tandy turned around Radio Shack
Tandy’s turnaround plan was to close the large stores and open a large number of smaller stores in rented locations so he could close struggling stores with minimal risk, close the catalog business, and go to cash-only sales, eliminating credit.
By 1966, Radio Shack was profitable. And a decade later, it was a nationwide chain with over 3,500 company owned stores and another 3,500 franchises.
This quote dates itself, but business writer Milton Moskowitz called Radio Shack “the most spectacular retail expansion under one name since the explosion of the A&P grocery chain in the early part of the century.” The subsequent disappearance of both of those chains shows how fragile business is. Maybe Charles Tandy is an Ozymandias, but at least for now there are still a fair number of people living who remember his empire.
As for A&P, I had no idea it liquidated in 2015 because I live west of the Mississippi River. I remember them pulling out of Missouri in the 1970s and slowly fading away. If you live east of the Mississippi, you’re more likely to remember it as something more than the grocery store your grandmother or great grandmother shopped at.
Charles Tandy as a manager
Charles Tandy worked hard and drove his people hard. Although his business was hobbies, he had no hobbies himself. He was notorious for coming into the office late, but then he stayed more than 12 hours and often worked weekends.
He was frequently a harsh critic. By some accounts he would find the person in the room who could best handle a chewing out, then chew that person out in front of everyone.
“There are some delicate souls in the world who wilt at the first harsh words. Then ther are others that you need to use a baseball bat to discuss things with. So I’d have to say that Charles had a dial setting for everybody,” Tandy corporate secretary Bill Michero said.
Ted and Elaine Yamagata, his primary importers from Japan, said he was very demanding. “He would sometimes tear us apart, but he always put us together and we always left very encouraged,” Elaine Yamagata said.
Bill Brown, his banker in Boston, called the act of getting up in the middle of a meeting when things aren’t going your way, walking toward the door, and announcing you were going back to wherever you came from, “pulling a Charles Tandy.”
Charles Tandy’s last years
Tandy made other acquisitions after Radio Shack, including an attempt at running department stores. None of them were as successful as Radio Shack, and in most cases Tandy divested the acquisitions within a few years. His last major project was revitalizing downtown Fort Worth, culminating in the construction of the eight-block Tandy Center.
Tandy died of a heart attack in his sleep on 4 November 1978 at the age of 60, and was buried at Greenwood Memorial Park in Fort Worth, Texas.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.