<ARTICLE> 5 <LEGEND> </LEGEND> <CIK> 0000909724 <NAME> The Leather Factory, Inc. <MULTIPLIER> 1 <CURRENCY> US DOLLARS <PERIOD-TYPE> 3-MOS <FISCAL-YEAR-END> DEC-31-1998 <PERIOD-START> JAN-01-1998 <PERIOD-END> MAR-31-1998 <EXCHANGE-RATE> 1 <CASH> 13,963 <SECURITIES> 0 <RECEIVABLES> 1,884,189 <ALLOWANCES> 40,000 <INVENTORY> 7,032,041 <CURRENT-ASSETS> 10,160,308 <PP&E> 2,561,861 <DEPRECIATION> 1,583,161 <TOTAL-ASSETS> 16,728,614 <CURRENT-LIABILITIES> 6,032,606 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 23,648 <OTHER-SE> 8,042,225 <TOTAL-LIABILITY-AND-EQUITY> 16,728,614 <SALES> 5,710,832 <TOTAL-REVENUES> 5,710,832 <CGS> 3,296,138 <TOTAL-COSTS> 3,296,138 <OTHER-EXPENSES> 0 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 240,645 <INCOME-PRETAX> (118,084) <INCOME-TAX> (29,556) <INCOME-CONTINUING> (88,528) <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> (88,528) <EPS-PRIMARY> (0.01) <EPS-DILUTED> (0.01)