Tandy Brands Accessories recorded a wider loss of US$2.2m in the third quarter, as the company's strategic transformation continued.

The accessories specialist posted a 20.6% sales decline to $30.1m in the three months to 31 March, blaming "a retail environment which continues to be challenging" for the decline.

Tandy said the net loss, which compared with a loss of $1.4m in the same period last year, was mainly due to not realising economies of scale and leverage with the sales decline.

"The company continues to pursue both new licences and private label programmes in order to diversify sales and generate opportunities for renewed growth," said Tandy.

The company plans to expand its women's gift line in order to appeal to a wider consumer base, as well as launching the Rolfs 1915 brand of men's small leather goods.

Cost reduction continues to be a high priority following the closure of Tandy's distribution facility in West Bend, Wisconsin, with the company now predicting annual cost savings of $4-7m, up on earlier estimates.

"We are satisfied our strategic transformation process is well under way," said JSB Jenkins, Tandy CEO.

"We believe that over the course of the next several quarters we will be able to capitalise on new business initiatives, drive our costs to appropriate levels and generate sustainable levels of profitability and cashflow."

Jenkins added that an executive search firm had been retained to aid the search for a new president and COO.