Retailers in North Texas Reveal the Impact of Tariffs on Their Businesses
Retailers in North Texas are revealing just what tariffs could mean to their businesses. In regulatory filings and other avenues, the locally based companies with stores around the U.S. — and sometimes the world — are explaining how they’re trying to navigate the new environment.
“We are currently evaluating our tariff cost exposure, developing mitigation strategies such as price increases and sourcing changes among others, and determining implementation timeline,” Fossil Group, the Richardson watch and accessories company, said in a document submitted earlier this month with the U.S. Securities and Exchange Commission.
The question of tariffs has hit retailers as the White House changed policies with countries to different degrees over the past several weeks. Walmart warned it would have to pass on some price increases to shoppers. While it’s unclear what could happen, there’s no question local retailers are trying to find their way amid the changing landscape and emerging challenges.
D-FW Retail News
Still, even as the concerns persist, shoppers have shown some sturdiness as store chains look to manage the impact that can vary widely from business to business. In April sales climbed yet again, according to the U.S. Census Bureau.
“Consumers are still spending despite widespread pessimism fueled by rising tariffs,” said Jack Kleinhenz, chief economist at the National Retail Federation. “While tariffs may have weighed on spending decisions, growth is coming at a moderate pace and consumer spending remains steady, reflecting a resilient economy.”
Overall retail sales in April were up 0.1% seasonally adjusted month over month and up 5.2% unadjusted year over year, the Census said.
Local Retailers Affected by Tariffs
Locally, in addition to Fossil, Sally Beauty and Tandy Leather, along with GameStop, have been clarifying just how much they’ll be affected by tariffs.
On a call with investors last week, Denise Paulonis, CEO of Sally Beauty, said the company exposure to incremental costs is limited to about 20% of its cost of goods sold, including approximately 10% tied to China and the rest mainly coming from western Europe, according to an edited transcript of the discussion that’s posted on the company’s site. The company, which is moving its headquarters from Denton to Plano, has over 4,000 stores worldwide.
“We also have levers to pull that will enable us to maintain our healthy gross margin profile,” Paulonis said. “This includes the combination of cost sharing with vendors and price increases in the coming quarters and sourcing optimization in the medium to long term.”
Tandy Leather and GameStop
At Fort Worth’s Tandy Leather, CEO Johan Hedberg touted sales and operating income that surpassed internal forecasts in the first quarter. Hedberg hopes to continue the “momentum” through the current quarter and beyond, but said customers see the impact from tariffs in the future.
“We have not yet felt the full impact of the coming tariffs on the U.S. economy and our products, which are nearly all imported,” Hedberg said in a statement. “If tariffs remain at the currently announced levels, this will necessarily require us to increase our retail prices and likely lead to unavoidable declines in our sales and profits.”
Product manufacturing is primarily outsourced to third parties across multiple countries, most notably China, the company said in a regulatory filing.
“The global tariff environment is changing rapidly, and we cannot be assured that we will not be materially negatively impacted by these changes,” it said.
Fossil and GameStop’s Mitigation Strategies
At Fossil, most of its products are assembled or manufactured overseas, with the substantial majority imported from China during fiscal year ended Dec. 28. About 25% of net sales came from within the U.S.
While tariffs and trade policies did not have a significant impact on financial results for the first quarter, future adverse effects on sales and other matters “may occur if current tariff levels persist, especially for goods imported from China,” a filing said.
Fossil CEO Franco Fogliato, said there are ways to address the changing trade picture.
“Our diverse global footprint limits our tariff exposure,” Fogliato said in a statement. “We have a number of levers and mitigation strategies that are expected to help offset impacts and protect our healthy gross margin profile in 2025.”
Grapevine-based GameStop said in March that changes to tariffs and import/export regulations may negatively affect its future financial condition.
“A significant portion of the products we offer are purchased from foreign vendors or manufactured in foreign countries,” the video game retailer said in a filing. “In recent months, trade tensions between the United States and other countries have escalated.”
Atlanta-based retailer says it won’t follow other firms in hiking prices as a result of U.S. trade war.
President’s social media post urges restraint from Arkansas based retailer.
Conclusion
In conclusion, the impact of tariffs on retailers in North Texas is a complex issue, with various companies adopting different strategies to mitigate the effects. While some retailers like Home Depot and Walmart are trying to absorb the costs, others like Fossil and GameStop are considering price increases. As the trade tensions between the U.S. and other countries continue to escalate, it remains to be seen how the retail industry will be affected in the long run.
FAQs
Q: What are tariffs and how do they affect retailers?
A: Tariffs are taxes imposed on imported goods, and they can increase the cost of products for retailers, potentially leading to higher prices for consumers.
Q: Which retailers in North Texas are affected by tariffs?
A: Retailers such as Fossil, Sally Beauty, Tandy Leather, and GameStop have reported being affected by tariffs.
Q: How are retailers mitigating the effects of tariffs?
A: Retailers are adopting various strategies, including price increases, cost sharing with vendors, and sourcing optimization, to mitigate the
