UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2008

Commission File Number 0-18927

TANDY BRANDS ACCESSORIES, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 75-2349915
(I.R.S. Employer
Identification No.)

690 East Lamar Boulevard, Suite 200, Arlington, TX 76011
(Address of principal executive offices and zip code)

817-548-0090
(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report:
Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes                 o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes                 þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class
Common stock, $1.00 par value Number of shares outstanding
at November 7, 2008
6,990,821

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1 Financial Statements	4 - 9
Item 2 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	10-12
Item 4T Controls And Procedures	12
PART II — OTHER INFORMATION
Item 1A Risk Factors	12
Item 2 Unregistered Sales Of Equity Securities And Use Of Proceeds	13
Item 4 Submission Of Matters To A Vote Of Security Holders	13
Item 6 Exhibits	13
SIGNATURES	14
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32.1

2

This Form 10-Q contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business, and other characterizations of future events or circumstances are forward-looking statements. We have based these forward-looking statements on our current expectations about future events, estimates and projections about the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Our actual results may differ materially from those suggested by these forward-looking statements for various reasons, including those identified under “Risk Factors” included in our 2008 Annual Report on Form 10-K. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof. Except as required under federal securities laws and the rules and regulations of the United States Securities and Exchange Commission, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

References in this Quarterly Report on Form 10-Q to “we”, “our”, “us”, or the “Company” refer to Tandy Brands Accessories, Inc. and its subsidiaries unless the context requires otherwise.

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PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Operations
(in thousands except per share amounts)
(unaudited)

	Three Months Ended
	September 30
	2008			2007
Net sales	$	34,617		$	39,464
Cost of goods sold		22,607			26,634
Gross margin		12,010			12,830
Selling, general and administrative expenses		12,401			14,441
Depreciation and amortization		569			976
Total operating expenses		12,970			15,417
Operating loss		(960	)		(2,587	)
Interest expense		(148	)		(280	)
Other income		61			45
Loss before income taxes		(1,047	)		(2,822	)
Income taxes (benefit)		233			(1,087	)
Net loss	$	(1,280	)	$	(1,735	)
Loss per common share	$	(0.18	)	$	(0.25	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.25	)
Cash dividends declared per common share	$	0.04		$	0.04
Common shares outstanding		6,988			6,826
Common shares outstanding assuming dilution		6,988			6,826

The accompanying notes are an integral part of these consolidated financial statements.

4

Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Balance Sheets
(in thousands)
(unaudited)

	September 30			June 30
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	2,102		$	2,855
Accounts receivable		26,411			22,147
Inventories		48,489			35,535
Other current assets		7,246			8,783
Total current assets		84,248			69,320
Property and equipment		4,911			5,382
Other assets:
Intangibles		2,986			3,069
Other assets		2,571			1,617
Total other assets		5,557			4,686
	$	94,716		$	79,388
Liabilities And Stockholders’ Equity
Current liabilities:
Accounts payable	$	12,498		$	10,312
Accrued expenses		5,317			5,361
Note payable		15,441			363
Total current liabilities		33,256			16,036
Other liabilities:
Supplemental executive retirement obligation		1,813			1,893
Other liabilities		3,620			3,581
Total other liabilities		5,433			5,474
Stockholders’ equity:
Preferred stock, $1.00 par value, 1,000 shares authorized, none issued		—			—
Common stock, $1.00 par value, 10,000 shares authorized, 7,048 shares and 7,049 shares issued and outstanding		7,048			7,049
Additional paid-in capital		34,819			34,840
Retained earnings		13,775			15,337
Other comprehensive income		1,435			1,666
Shares held by Benefit Restoration Plan Trust		(1,050	)		(1,014	)
Total stockholders’ equity		56,027			57,878
	$	94,716		$	79,388

The accompanying notes are an integral part of these consolidated financial statements.

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Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Cash Flows
(in thousands)
(unaudited)

	Three Months Ended
	September 30
	2008			2007
Cash used by operating activities:
Net loss	$	(1,280	)	$	(1,735	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		577			976
Share-based compensation expense		90			234
Amortization of debt origination costs		42			35
Excess income tax benefit from stock option exercises		—			(9	)
Deferred income taxes		—			(295	)
Other		(270	)		510
Changes in assets and liabilities:
Accounts receivable		(4,264	)		(1,869	)
Inventories		(12,954	)		(3,699	)
Other assets		1,583			588
Accounts payable		2,185			(1,126	)
Accrued expenses		(29	)		(1,175	)
Net cash used by operating activities		(14,320	)		(7,565	)
Cash used for investing activities:
Purchases of property and equipment		(81	)		(184	)
Funding supplemental executive retirement plan trust		(1,060	)		—
Net cash used for investing activities		(1,141	)		(184	)
Cash provided by financing activities:
Stock purchase program (withdrawals)		(89	)		318
Stock options exercised		—			66
Dividends paid		(282	)		(276	)
Change in cash overdrafts		1			207
Net note borrowings		15,078			6,931
Net cash provided by financing activities		14,708			7,246
Net decrease in cash and cash equivalents		(753	)		(503	)
Cash and cash equivalents beginning of year		2,855			4,076
Cash and cash equivalents end of period	$	2,102		$	3,573
Supplemental cash flow information:
Interest paid	$	52		$	217
Income taxes paid	$	121		$	80

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Accounting Principles

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The preparation of our consolidated financial statements requires the use of estimates that affect the reported value of assets, liabilities, revenues, and expenses. These estimates are based on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our conclusions. We continually evaluate the information used to make these estimates as the business and economic environment changes. Actual results may differ from these estimates under different assumptions or conditions. Such differences could have a material impact on our future financial position, results of operations, and cash flows.

The consolidated balance sheet at June 30, 2008 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These interim unaudited consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Historically our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year. Sales for the first quarter of fiscal 2009 and 2008 were not consistent with historical patterns due to the very difficult retail environment in both years, deliveries to customers shifting from the first to the second quarter this year, and curtailed replenishment orders by one of our largest customers last year. Consequently, operating results for the three-month period ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ended June 30, 2009.

Note 2 — Recent Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” (“SFAS 159”) permits choosing to measure certain financial assets and liabilities at fair value. We have not elected to measure any assets or liabilities at fair value which were not being so measured prior to our adopting SFAS 159 on July 1, 2008.

Effective July 1, 2008, we adopted the disclosure requirements of SFAS No. 157, “Fair Value Measurements,” (“SFAS 157”), issued by the FASB in September 2006, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements required under other accounting pronouncements, but does not change existing guidance for carrying instruments at fair value. FASB Staff Position No. 157-2 issued in February 2008 allows us to delay application of SFAS 157 for nonfinancial assets and liabilities until the first quarter of fiscal 2010.

Note 3 — Credit Arrangements

We have a $35 million credit facility for borrowings and letters of credit based on accounts receivable and inventory levels. At September 30, 2008 we had outstanding borrowings under the facility of $15.4 million bearing interest at 5.25%, outstanding letters of credit totaling $2.5 million, and $12.2 million borrowing availability. Borrowings under the facility, which are due on the facility’s expiration date in February 2010, bear interest at the lender’s prime rate plus 0.25% or LIBOR plus 2.75% as designated by the Company. The effect of a 1% increase or decrease in the interest rate on the amount borrowed at September 30, 2008 could lower or increase our annual pretax operating results by $154,000.

The credit facility is guaranteed by substantially all of our subsidiaries and is secured by substantially all of our assets and those of our subsidiaries. It requires the maintenance of a tangible net worth financial ratio which, if not met, could adversely impact our liquidity. The facility contains customary representations and warranties and we have agreed to certain affirmative covenants, including reporting requirements. The facility also limits our ability to engage in certain actions without the lender’s consent, including, repurchasing our common stock, entering into certain mergers or consolidations, guaranteeing or incurring certain debt, engaging in certain stock or asset

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acquisitions, paying dividends without the lender’s approval, making certain investments in other entities, prepaying debt, and making certain property transfers.

Our Canadian subsidiary has a CAD $1 million credit facility (direct advances limited to US $830,000) secured by its cash, credit balances, and deposit instruments with interest at the lender’s prime or US base rates. There have been no borrowings under this line of credit.

We may need to request modifications to the eligible inventory and accounts receivable borrowing limitations under our credit facility for part of fiscal 2009 if our sales expectations are not met and accounts receivable are not timely collected due to customers conserving their cash by delaying payments to us. Before the end of fiscal 2009, we also may have to request a waiver of the credit agreement tangible net worth financial ratio covenant if we incur more than a minimal net loss for the fiscal year.

Note 4 — Business Segments And Related Information

We sell our products through all major retail distribution channels throughout North America, including mass merchants, national chain stores, department stores, men’s and women’s specialty stores, catalog retailers, grocery stores, drug stores, golf pro shops, sporting goods stores, automobile and tire stores, and the retail exchange operations of the United States military. We and our corresponding customer relationships are organized along men’s and women’s product lines. As a result we have two reportable segments: (1) men’s accessories, consisting of belts, gifts, wallets and other small leather goods, suspenders, and sporting goods; and (2) women’s accessories, consisting of belts, small leather goods, and gifts. General corporate expenses and depreciation and amortization related to assets recorded in our corporate accounting records are allocated to each segment based on the respective segment’s asset base. Management measures each segment based upon income or loss before income taxes utilizing accounting policies consistent in all material respects with those described in Note 2 of the notes to consolidated financial statements included in our 2008 Annual Report of Form 10-K filed with the Securities and Exchange Commission. No inter-segment revenue is recorded.

The following presents operating and asset information by reportable segment (in thousands).

	Three Months Ended
	September 30
	2008			2007
Net sales:
Men’s accessories	$	26,405		$	30,212
Women’s accessories		8,212			9,252
	$	34,617		$	39,464
Operating loss: (1)
Men’s accessories	$	(873	)	$	(2,033	)
Women’s accessories		(87	)		(554	)
		(960	)		(2,587	)
Interest expense		(148	)		(280	)
Other income		61			45
Loss before income taxes	$	(1,047	)	$	(2,822	)
Depreciation and amortization:
Men’s accessories	$	376		$	707
Women’s accessories		193			269
	$	569		$	976
Capital expenditures:
Men’s accessories	$	48		$	33
Women’s accessories		—			—
Corporate		33			151
	$	81		$	184

⁽¹⁾ Operating loss consists of net sales less cost of goods sold and specifically identifiable and allocated selling, general and administrative expenses.

8

Note 5 — Fair Value Measurements

The only account we measure at fair value is the rabbi trust established to set aside amounts to assist in satisfying our supplemental executive retirement obligation. The trust’s assets (September 30, 2008 — $1.8 million) are measured at their quoted prices in active markets (Level 1 of the SFAS 157 fair value hierarchy).

Note 6 — Income Taxes

The approximately $500,000 fiscal 2009 deferred tax benefit of our pretax loss was offset by a valuation allowance provision as our operating results over the past three years and projections of future operating results do not currently indicate it is more likely than not the deferred tax benefits will ultimately be realized. The $233,000 income tax provision in the current quarter relates to the earnings of our Canadian subsidiary ($140,000) and taxes, interest, and penalties for uncertain tax positions ($93,000). No deferred tax valuation allowance provision was recognized in the first quarter of fiscal 2008 and the tax benefit of the pretax loss was reduced $38,000, net of income taxes, for interest on unrecognized tax benefits of uncertain tax positions.

Note 7 — Comprehensive Loss

The following presents the components of comprehensive loss (in thousands).

	Three Months Ended
	September 30
	2008			2007
Net loss	$	(1,280	)	$	(1,735	)
Currency translation adjustments		(231	)		528
Comprehensive loss	$	(1,511	)	$	(1,207	)

Note 8 — Earnings Per Share

The following presents the computation of basic and diluted earnings per share (in thousands except per share amounts).

	Three Months Ended
	September 30
	2008			2007
Numerator for basic and diluted earnings per share:
Net loss	$	(1,280	)	$	(1,735	)
Denominator:
Weighted-average shares outstanding		6,986			6,822
Contingently issuable shares		2			4
Denominator for basic and diluted earnings per share		6,988			6,826
Loss per common share	$	(0.18	)	$	(0.25	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.25	)

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ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Item 2 should be read in the context of the information included in our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission and elsewhere in this Quarterly Report, including our consolidated financial statements and accompanying notes in Item 1 of this Quarterly Report.

BUSINESS

We are a leading designer and marketer of branded men’s, women’s and children’s accessories, including belts, small leather goods, and gift accessories. Our product line also includes handbags and sporting goods. Our merchandise is marketed under a broad portfolio of nationally recognized licensed and proprietary brand names, including DOCKERS®, LEVI’S®, LEVI STRAUSS SIGNATURE™, TOTES®, ROLFS®, WOOLRICH®, CANTERBURY®, PRINCE GARDNER®, PRINCESS GARDNER®, AMITY®, COLETTA®, STAGG®, ACCESSORY DESIGN GROUP®, TIGER®, ETON®, SURPLUS®, EILEEN WEST™, GOODYEAR™, GENO D’LUCCA™, DR. MARTENS®, and DR. MARTENS AIRWAIR®, as well as private brands for major retail customers. We sell our products through all major retail distribution channels throughout North America, including mass merchants, national chain stores, department stores, men’s and women’s specialty stores, catalog retailers, grocery stores, drug stores, golf pro shops, sporting goods stores, automobile and tire stores, and the retail exchange operations of the United States military.

FISCAL 2009 COMPARED TO FISCAL 2008

Net Sales And Gross Margin

The following presents sales and gross margin data for our reportable segments (in thousands).

	Three Months Ended
	September 30
	2008			2007
Net sales:
Men’s accessories	$	26,405		$	30,212
Women’s accessories		8,212			9,252
	$	34,617		$	39,464
Gross margin:
Men’s accessories	$	8,919		$	9,309
Women’s accessories		3,091			3,521
	$	12,010		$	12,830
Gross margin percent of sales:
Men’s accessories		33.8	%		30.8	%
Women’s accessories		37.6			38.1
Total		34.7			32.5

Net sales for the first quarter (2009 — $34.6 million; 2008 — $39.5 million) were lower this year (men’s accessories — $3.8 million; women’s accessories — $1.0 million) as the difficult retail environment, which began to affect our sales over a year ago, accelerated its decline and some deliveries of belts and small leather goods to customers shifted from the first to the second quarter this year. Approximately $3.4 million of the men’s accessories sales decline was partly offset by lower discounts and allowances for returns primarily for our gift products. The first quarter last year included more than $2.5 million in men’s belt and small leather goods sales to two customers as part of their closeout programs as they shifted to new private labels, one of which we replaced with a new program.

Our overall gross margin percentage of net sales (2009 — 34.7%; 2008 — 32.5%) in the current year included a 1.9 percentage point benefit from sales of out-of-program inventory at prices exceeding the inventory’s previously reduced carrying value; however, a significant portion of the benefit was offset by repackaging costs included in selling, general and administrative expenses. The men’s accessories 2009 margin percentage was 3.0 percentage points higher than the margin in the prior year which was depressed primarily by clearance sales of belts and small leather goods. The margin percentage for men’s accessories products, other than gifts, improved 4.4 percentage points primarily due to lower product costs from overseas suppliers and 1.5 percentage points from out-of-program inventory sales. Increased costs together with lower discounts and allowances compared to last year reduced the

10

men’s gift accessories margins by 9.7 percentage points which was offset by 3.1 percentage points from out-of-program inventory sales. A 3.2 percentage point lower women’s accessories 2009 margin resulting from increased costs was largely mitigated by sales of out-of-program inventory.

Expenses And Taxes

The following presents expense data by reportable segment (in thousands).

	Three Months Ended
	September 30
	2008		2007
Selling, general and administrative expenses:
Men’s accessories	$	9,416	$	10,635
Women’s accessories		2,985		3,806
	$	12,401	$	14,441
Depreciation and amortization:
Men’s accessories	$	376	$	707
Women’s accessories		193		269
	$	569	$	976
Interest expense	$	148	$	280
Income taxes (benefit)	$	233	$	(1,087	)

Selling, general and administrative expenses (“SG&A”) in the first quarter of fiscal 2009 were more than $2 million less than the prior year. The major changes were derived from reduced distribution costs ($873,000), including closing our men’s accessories distribution facility in West Bend, Wisconsin, lower employment expenses ($826,000) resulting from workforce reductions, and fewer costs being incurred for product samples, advertising and travel (each in the $100,000 to $150,000 range). Other cost saving initiatives were offset by increases in such things as professional services and recruiting.

Depreciation and amortization (2009 — $569,000; 2008 — $976,000) was lower this year primarily as the result of equipment and software reaching the end of their estimated depreciable lives and a $158,000 reduction attributable to last year’s closing of the West Bend facility and writing off customer lists.

Interest expense in the first quarter of fiscal 2009 was 47% less than our debt costs in the same quarter of fiscal 2008 as both our borrowings and the interest rates were lower in the current year.

Information about our fiscal 2009 income tax provision and the tax benefit recognized in fiscal 2008 is incorporated herein by reference to Note 6 of the notes to consolidated financial statements in Item 1 of this Quarterly Report.

SEASONALITY

Historically our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year. Sales for the first quarter of fiscal 2009 and 2008 were not consistent with historical patterns due to the very difficult retail environment in both years, deliveries to customers shifting from the first to the second quarter this year, and curtailed replenishment orders by one of our largest customers last year.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity, which we believe will provide adequate financial resources for our foreseeable working capital needs, are cash flows from operating activities and our credit facilities ($12.2 million borrowing availability at September 30, 2008). Historically our first quarter operating activities result in net cash outflows due to procurement of holiday inventory shipped in the second quarter. Information about our credit facilities is incorporated herein by reference to Note 3 of the notes to consolidated financial statements included in Item 1 of this Quarterly Report.

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Operating cash flows for the first quarter of both fiscal years were negative (2009 — $14.3 million; 2008 — $7.6 million) as inventories increased (2009 — $13.0 million; 2008 — $3.7 million) in advance of shipments in the second quarter and accounts receivable increased (2009 — $4.3 million; 2008 — $1.9 million) from sales in the latter part of the first quarter which are not collected until later in the year. The larger increase in inventories compared to last year was primarily the result of deliveries to customers shifting from the first to the second quarter (including an approximately $4 million first-time sale of gift products to one of our largest customers) and approximately $3 million of the early procurement occurring before the beginning of fiscal 2008. Seasonal borrowings funded a substantial part of the operating cash outflows in both years together with a $2.2 million increase in accounts payable this year and the receipt of a $1.2 million tax refund included in other current assets at June 30, 2008.

Investing activities included nominal amounts of capital expenditures in the first quarter of both years and $1.1 million funding in fiscal 2009 of the rabbi trust established to set aside amounts to assist in satisfying our supplemental executive retirement obligation. Financing activities included the payment of dividends (2009 — $282,000; 2008 — $276,000) and stock purchase program transactions (2009 — $89,000 net cash distributions in lieu of issuing shares as the result of the program being suspended; 2008 — $318,000 net contributions).

During fiscal 2009 we declared the following cash dividend:

Declaration Date	Record Date	Payable Date	Per Share
August 19, 2008	September 30, 2008	October 17, 2008	$	0.04

Our board of directors has deferred consideration of declaring a quarterly dividend for payment in January 2009.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes in the critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended June 30, 2008.

ITEM 4T — CONTROLS AND PROCEDURES

Disclosure Controls And Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2008 in alerting them in a timely manner to material information required to be disclosed by us in the reports we file with or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934.

Changes In Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the first quarter of fiscal 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our Principal Accounting Officer and Controller accepted a position with another company and resigned effective August 5, 2008. Our Chief Financial Officer assumed the Principal Accounting Officer responsibilities.

PART II — OTHER INFORMATION

ITEM 1A — RISK FACTORS

In addition to the information in this Quarterly Report on Form 10-Q, consideration should be given to the risk factors in Part I, “Item 1A — Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2008 which could materially and adversely affect our business, results of operations, and financial condition. There have been no significant changes in the risk factors disclosed in that Annual Report on Form 10-K.

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ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases Of Equity Securities

The following provides information about repurchases of shares of common stock made by us during the quarter ended September 30, 2008. Of the total shares purchased, 8,031 were withheld from employees’ restricted stock awards for employment taxes due when the stock vested. The remaining shares were purchased in the open market and are held in a rabbi trust established under our Benefit Restoration Plan.

					Total Number Of		Maximum Number
	Total				Shares Purchased		Of Shares That May
	Number		Average		As Part Of Publicly		Yet Be Purchased As
	Of Shares		Price Paid		Announced Plans		Part Of The Plans
Period	Purchased		Per Share		Or Programs		Or Programs
July 1, 2008 to July 31, 2008		5,383	$	5.50		N/A		N/A
August 1, 2008 to August 31, 2008		702		5.71		N/A		N/A
September 1, 2008 to September 30, 2008		8,414		5.20		N/A		N/A
Total		14,499		5.34		N/A		N/A

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At our 2008 Annual Meeting of Stockholders on October 30, 2008, our stockholders voted on proposals to (1) elect two directors to our board of directors, and (2) ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2009. NSL Capital Management, LLC (“NSL”) initiated a proxy contest and solicited proxies from our stockholders to elect Nicholas S. Levis and Evan Kagan to our board of directors instead of our Company’s nominees. No representatives of NSL attended the Annual Meeting and, as a result, no proxies for NSL’s nominees were voted.

Mr. J.S.B. Jenkins and Mr. George C. Lake were re-elected to our board of directors to serve until the 2009 annual meeting of stockholders, or until their successors are elected and qualified. The number of votes cast for and withheld for each nominee was as follows:

Nominee	For		Withheld
J.S.B. Jenkins		3,740,711		1,417,257
George C. Lake		5,052,948		105,020

Votes on the proposal to ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2009 were as follows:

For 5,136,485 Against 15,014 Abstain 6,469

Continuing members of our board of directors are: Dr. James F. Gaertner, Roger R. Hemminghaus, and Gene Stallings having terms expiring in 2009; and Colombe M. Nicholas, W. Grady Rosier, and William D. Summitt having terms expiring in 2010.

Following the Annual Meeting, our directors increased the size of our board of directors from eight to nine members and appointed Mr. N. Roderick McGeachy, III, our President and Chief Executive Officer, as a director to serve until the 2009 annual meeting of stockholders, or until his successor is elected and qualified.

ITEM 6 — EXHIBITS

The Exhibit Index immediately preceding the exhibits required to be filed is incorporated herein by reference.

13

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TANDY BRANDS ACCESSORIES, INC.
	(Registrant)
November 10, 2008	/s/ N. Roderick McGeachy, III
	N. Roderick McGeachy, III
	President and Chief Executive Officer
	(principal executive officer)
	/s/ M.C. Mackey
	M.C. Mackey
	Chief Financial Officer
	(principal financial officer and principal accounting officer)

14

TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX

				Incorporated by Reference
				(if applicable)
Exhibit Number and Description				Form	Date	File No.	Exhibit
(3)	Articles of Incorporation and Bylaws
		3.1	Certificate of Incorporation of Tandy Brands Accessories, Inc.	S-1	11/02/90	33-37588		3.1
		3.2	Certificate of Amendment of the Certificate of Incorporation of Tandy Brands Accessories, Inc.	8-K	11/02/07	0-18927		3.1
		3.3	Amended and Restated Bylaws of Tandy Brands Accessories, Inc., effective July 2007	8-K	7/13/07	0-18927		3.01
		3.4	Amendment No. 1 to Amended and Restated Bylaws of Tandy Brands Accessories, Inc.	8-K	11/02/07	0-18927		3.2
(4)	Instruments Defining the Rights of Security Holders, Including Indentures
		4.1	Form of Common Stock Certificate of Tandy Brands Accessories, Inc.	S-1	12/17/90	33-37588		4.2
		4.2	Certificate of Elimination of Series A Junior Participating Cumulative Preferred Stock of Tandy Brands Accessories, Inc.	8-K	10/24/07	01-18927		3.1
		4.3	Credit Agreement by and between Tandy Brands Accessories, Inc. and Comerica Bank dated as of February 12, 2008	10-Q	2/14/08	0-18927		4.3
(10)	Material Contracts
		10.1	Employment Agreement by and between Tandy Brands Accessories, Inc. and N. Roderick McGeachy, III effective as of October 1, 2008* **	N/A	N/A	N/A		N/A
		10.2	Nonqualified Stock Option Agreement pursuant to the Tandy Brands Accessories, Inc. 2002 Omnibus Plan with N. Roderick McGeachy, III dated October 1, 2008* **	N/A	N/A	N/A		N/A
(31)	Rule 13a-14(a)/15d-14(a) Certifications
		31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)**	N/A	N/A	N/A		N/A
		31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)**	N/A	N/A	N/A		N/A

TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX

				Incorporated by Reference
				(if applicable)
Exhibit Number and Description				Form	Date	File No.	Exhibit
(32)	Section 1350 Certifications
		32.1	Section 1350 Certifications (Chief Executive Officer and Chief Financial Officer)**	N/A	N/A	N/A		N/A

*	Management contract or compensatory plan
**	Filed herewith