In 1919, a small leather company was founded in Fort Worth by David Lewis Tandy and Norton Hinckley. The Hinckley-Tandy Leather Company specialized in leather show laces, shoe soles, leather and rubber heels, and other shoe-findings. Tandy focused on sales and marketing while Hinckley managed the internal business operations and inventory. The company did well, bought a larger location in 1923 and expanded to Beaumont in 1927. The company scaled back during the Depression, but they survived.
Charles David Tandy
Charles David Tandy, the son of David Lewis Tandy, was born a year before Hinckley-Tandy started operations, and he began working at the company at the age of twelve. He graduated from Texas Christian University in 1940, briefly attended the Harvard Business School, and he then joined the US Navy. The younger Tandy served as a supply officer, but he also setup a leather working program for hospitalized personnel. This was successful, and it provided the inspiration for his first major contribution to Hinckley-Tandy after his discharge in 1948: Tandy Leather, a mail order hobby division of the company.
Disagreements between Hinckley and the Tandys were growing. Hinckley wanted to focus on the shoe-findings that had built the company, while the Tandys had greater ambitions. The Tandy family ended up in control of the company and the hobby division had achieved 100% ROI in its first year. In May of 1950, Charles Tandy opened the first two retail locations specialized in leather craft, but the company’s main revenues came from their mail order business. At two years, the company had achieved $2.9 million in sales, opened 15 stores, and wasn’t yet ready to stop its expansion. By 1952, the company had stores across the country, had acquired a few failing competitors, and had established an interesting method of encouraging both employees and store managers to succeed. Each store was incorporated individually, and store managers were required to own a 25% stake in the store. Should a manager lack the capital personally, Tandy Leather was available to provide the loan for that purpose, and Dave Tandy would serve as a co-signer should it be needed. For regular employees across the company, year end bonuses were provided, and all staff were eligible and encouraged to purchase equity. This worked well; by 1954, the company’s catalog was 68 pages and served a million customers, four factories stocked the shelves of 67 stores spread across 36 states and the territory of Hawaii.
While one might assume that taxation would require respiration, this is not so. In 1954, Dave Tandy passed away and the estate taxes hurt the company’s finances rather badly. This sudden shift in the company’s fortunes also meant that employee stock holders had no meaningful way to assess the value of their shares. As the remaining Tandy in our story saw it, the easiest way to ameliorate the concerns of share holders was for the company to go public. Given the company’s size, this would have been difficult, and he therefore sought a merger with an already publicly listed company.
The merger target Tandy found was the American Hide and Leather Company. AHLC was insolvent and this presented Tandy with the chance to remain in control of the resulting conglomerate. Tandy Leather provided AHLC the money to buy Tandy Leather, and Tandy Leather share holders had the option to buy shares in AHLC. This merger was completed in 1955, the company was renamed to General American Industries Inc, Tandy became the president, and the combined entity had a five year tax shelter due to AHLC’s insolvency. With AHLC as the corporate parent, profits from Tandy Leather were being used to cover the losses of other conglomerate members such as Western Leather and Tex Tan. To stop this would mean that Tandy would need to regain control. This was achieved in November of 1959.
With Tandy now in control, the unprofitable child companies were sold at a loss, the company’s headquarters was moved to Fort Worth, the conglomerate was renamed the Tandy Corporation, and the stock symbol became TAN. At open the stock was $4/share, and by the end of 1961 it was $11/share.
With ownership, earnings, taxes, and other issues settled, Tandy changed his focus back to growth. The first two initiatives were experimental retail stores Tandy Craft and Hobby Mart in November of 1961. The first stores were around 18,000 square feet, sold more than 50,000 items of varying kinds for a variety of hobbies, and notably included Electronic Crafts like DIY radio and stereo kits. Other diversification efforts continued over the decade with names like The Mart, and Pier 1 Imports.
Two years after the founding of Hinckley-Tandy, on the other side of the country, brothers Theodore and Milton Deutschmann founded Radio Shack in Boston. The company’s aim was to serve the growing amateur radio market, and their first offerings were surplus military equipment. Ironically, these were two London born men operating a block away from the Boston Massacre, but history is always funny that way. The first “retail” location was actually a basement at 46 Brattle Street. So, we have two brothers with a modest square footage in a basement on what was decidedly not a major thoroughfare. Still, the rent was rather cheap at just $50/month (a bit shy of $900/mo in 2025), and the company was originally a sole-proprietorship so there weren’t investors or corporate boards to worry about. That ownership structure changed on the 26th of December in 1935 when the company became the Radio Shack Corporation. On the 1st of October in 1938, the company moved to 167 Washington Street, and they chose to start a mail order catalog in 1939. In 1954, Radio Shack began selling private label products under the name Realist, but the name was changed to Realistic after some litigation. In 1959, the company moved their headquarters to 730 Commonwealth Avenue. By the 1960s, the company had nine retail stores, the catalog, and the company was a leader in their market. Despite their seeming success, the Radio Shack wasn’t the best run, and an experiment with customer credit offerings turned out to be a bad move. By 1963, the company was moribund with nearly $800,000 of credit extended to customers that was uncollectible.
As we’ve already seen, Tandy had recently expanded his companies into the hobby electronics market, and he was something of an expert in retail operations. In 1963, Tandy acquired Radio Shack for $300,000 (around $3.1 million in 2025) and formed Tandy Radio Shack Corporation more commonly recognized as TRS. Nearly all of Tandy’s attention switched from the leather companies to Radio Shack. The goal of Radio Shack was largely unchanged under Tandy’s ownership with that being to serve hobbyists, children, and those wishing to save some money buying cheaper stuff and modifying and accessorizing as they saw fit. What did change was inventory. First, Tandy cut 17,500 items, and those that remained were the company’s best sellers. Second, those items that remained were mostly private label which eliminated middle-man markups. These private label products were created with exclusive contracts directly with manufacturers. Over time, this would change to products designed and manufactured by the Tandy Corporation. The keys to Radio Shack’s survival were then high profit margin, high inventory turnover, in-house marketing, in-house distribution, and consistently stocking only what the market wanted. As for marketing, roughly 9% of profit went into advertising in the years immediately following the acquisition.
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