The Sharper Image

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The Sharper Image
Type Private
Founded San Francisco, California 1977
Headquarters New York, New York
Key people Robert Conway, President and CEO
Industry Retail
Website www.sharperimage.com

The Sharper Image is an American brand that specialized in high-end electronics and gifts. The company was founded by Richard Thalheimer and had been in business since 1977 until its closing in 2008. The company sold merchandise through dozens of retail stores throughout the United States, a monthly catalog, and its website. The company also had business-to-business sales teams. The sales teams were used to market products for corporate incentive programs and wholesale to retailers.

On February 19, 2008, the company filed for Chapter 11 bankruptcy, blaming low sales aggravated by a decline in consumer spending and negative publicity surrounding its Ionic Breeze air purifiers.[1] At the time of declaring bankruptcy, the company had 2,500 employees. By the end of 2008, all of the retail stores had closed, and the company assets were acquired by Hilco Merchant Resources and Gordon Brothers Group.[2]

After the purchase, the company began licensing products and selling them through third party retailers such as Best Buy and Bed Bath & Beyond. New products are created through partnerships with other companies.[3] Products are also sold through the company's website.

Contents

[edit] History

The Sharper Image Corporation was the brainchild of Richard Thalheimer. The company started as a catalog business to sell jogging watches.[4] He started his advertising in running magazines, and within 2 years he had made his first million. This inspired him to start The Sharper Image.[citation needed]

The year 2006 saw a shakeup in the board of directors of the company, including the removal of Richard Thalheimer as CEO.[5]

Thalheimer was replaced by Chairman Jerry W. Levin, who was formally Chairman and CEO of American Household/Sunbeam, Coleman, and Revlon. [6]

On April 9, 2007, Steven A. Lightman became the President and CEO.[7] In May 2007, the company announced the hiring of Rebecca Roedell as Chief Financial Officer.[8]

Levin is also Chairman & CEO of JW Levin Partners LLC, a management and investment firm, since February 2005. And as of October 2009, is Chairman and Interim CEO of Wilton Brands, Inc. Levin was Vice Chairman of Clinton Group, a private diversified asset management company, between December 2007 and October 2008.[9] On February 8, 2008, JWL Partners Acquisition Corp., a SPAC, or special purpose acquisition company, submitted an IPO filing. The filing showed US$200 million proceeds targeted. The underwriting group was listed as Credit Suisse and Ladenburg Thalmann & Co. They applied to list under the ticker “JWL.U” on the American Stock Exchange. The filing stated that the blank check corporation intends to acquire or acquire control of one or more businesses. The filing was eventually withdrawn due to the economic market conditions.[10][11]

On April 10, 2008, Levin resigned as a member and Chairman of the Board of the company to pursue participating with other investors to acquire some or all of the company’s businesses or assets. His group's bid did not succeed. [12]

In May 2007, Richard Thalheimer created his own e-commerce site http://richardsolo.com, which has no affiliation with The Sharper Image, and sells items that were typical of the Sharper Image when its focus was offbeat consumer electronics.

[edit] Bankruptcy

On February 19, 2008, The Sharper Image stock reached an all-time low of 41 cents a share, followed by 29 cents a share on February 20, 2008. On February 25, 2008, The Sharper Image announced it had received notification that it would be delisted from the NASDAQ exchange. The company filed for protection with the U.S. bankruptcy court in Wilmington, Delaware. Sharper Image said it had $251.5 million of assets and $199 million of debts as of January 31, 2008, according to the filing.[13] Cash on hand totaled about $700,000.[14]

On May 29, 2008, a joint venture led by units of private investment firms Hilco Consumer Capital Corp. and Gordon Brothers Group won a bankruptcy auction to acquire the assets of The Sharper Image, paying $49 million plus some contingent recovery for the company's assets.[15]

[edit] Post-bankruptcy

The Sharper Image name is now licensed as a product brand, by a joint venture between Hilco Consumer Capital, Gordon Brothers and Bluestar Alliance.[16][17] The brand is used to sell products through through third party retailers, including Best Buy, Bed Bath & Beyond and OfficeMax.[3] In August 2009, Camelot Venture Group began running the company website. They also announced plans to open new retail stores.[18]

[edit] Retail stores

The company had 184 locations nationwide, which represented close to 60% of the total company revenue.[citation needed] In its last few years more and more retail revenue share had been taken over by internet shoppers and Sharper Image's Ebay operation.[citation needed] After filing Chapter 11, The Sharper Image liquidated 96 of its stores, leaving only 88 stores still functioning under the company's ownership as of May 28, 2008. As of August 23, 2008, all retail stores had been closed, and the company vacated its former corporate headquarters at Hills Plaza in San Francisco, CA.[citation needed] Only five employees remain with the company.[citation needed]

[edit] Advertising and business

The Sharper Image's advertising budget was spent on the catalog for about the first 20 years of its existence.[citation needed] Once products like the Ionic Breeze were introduced, the company began using infomercials for advertising. Most other products in the home air purifier market (including those made by Oreck) already used this medium, so The Sharper Image followed.[citation needed] This move boosted sales, but led to confusion between prices advertised on television and those marked in the retail stores.[citation needed]

The company is known to receive special supplier contracts. For instance, its HW551 and HW552 product code massage chairs were specific to The Sharper Image, and Human Touch Interactive does not sell those specific chairs to any other retailer. Ever since the Robosapien was released on the market a few years ago, The Sharper Image had the exclusive rights to sell the "Signature Series" Robosapiens in chrome or blue-chrome, as opposed to the standard white models that are sold in other stores.

[edit] Consumer Reports lawsuit

In 2002, Consumer Reports tested many fan-driven air purifiers alongside The Sharper Image's Ionic Breeze Quadra. The Sharper Image was not happy with the results, and sued Consumer Reports in order to get what they thought would be a more fair testing of the product.[19] However, the suit was dismissed, primarily due to the court finding that the company "has not shown that the test protocol used by Consumers Union was scientifically, or otherwise, invalid," and had not "demonstrated a reasonable probability that any of the challenged statements were false." Furthermore, Sharper Image could not "come forward with any evidence from which a finding of malice could be made."[20]

Two years later, Consumer Reports stated that the Quadra could be dangerous to consumers' health, because of the trace levels of ozone produced by the unit.[21] As a result, sales plummeted, and the stores took back units that were even years old for a cash refund. The Sharper Image's response was to work with the Engelhard Corporation and create an ozone catalyst that would reduce the purified air of excess ozone before it circulated throughout the room.[22]

[edit] References

  1. ^ "Sharper Image files for Chapter 11 bankruptcy protection". http://www.usatoday.com/money/industries/retail/2008-02-20-sharper-image_N.htm?csp=34. Retrieved 2008-02-20. 
  2. ^ Chasan, Emily (2009-10-18). "Linens 'N Things returns to Home Outfitters stores". Forbes. http://www.forbes.com/feeds/afx/2009/10/08/afx6981934.html. Retrieved 2009-11-10. 
  3. ^ a b Taub, Eric (2009-01-18). "Sharper Image Stores Are Dead, but the Brand Goes On". New York Times. http://www.nytimes.com/2009/01/19/technology/companies/19sharper.html?ref=business. Retrieved 2009-11-10. 
  4. ^ Liedtke, Michael. "Sharper Image founder Thalheimer is removed as CEO". http://sfgate.com/cgi-bin/article.cgi?f=/news/archive/2006/09/26/financial/f084807D10.DTL&type=business. Retrieved 2007-08-09. 
  5. ^ Kim, Ryan. "Sharper Image axes chief executive". http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/09/27/BUGGLLD5L71.DTL&type=tech. Retrieved 2007-08-09. 
  6. ^ "Jerry W. Levin". http://www.ecolab.com/Investor/Governance/JerryLevin.html. Retrieved 2007-11-07. 
  7. ^ "Sharper Image Appoints Steven A. Lightman President and Chief Executive Officer". http://findarticles.com/p/articles/mi_m0EIN/is_2007_March_26/ai_n18770482. Retrieved 2007-08-09. 
  8. ^ "Sharper Image Hires Rebecca Roedell As CFO; Roedell To Replace Interim CFO Daniel Nelson — Update". http://www.rttnews.com/sp/todaystop.asp?date=05/11/2007&item=40&vid=0. Retrieved 2007-08-09. 
  9. ^ "Biography of Jerry W. Levin". http://phx.corporate-ir.net/phoenix.zhtml?c=117565&p=irol-govBio&ID=126218. Retrieved 2008-09-01. 
  10. ^ "SPAC IPO FILING: JWL Partners (JWL, SHRP)". February 11, 2008. http://www.marketwatch.com/news/story/spac-ipo-filing-jwl-partners/story.aspx?guid=%7BAE1648C8%2DE859%2D49CC%2DBB4D%2D94A4DF0F3AA5%7D. Retrieved 2008-09-01. 
  11. ^ "Initial Public Offerings (IPO): Business description of JWL PARTNERS ACQUISITION CORP.". http://ipoportal.edgar-online.com/ipo/textSection.asp?cikid=769994&fnid=57638&IPO=1&sec=bd&coname=JWL+PARTNERS+ACQUISITION+CORP.. Retrieved 2008-09-01. 
  12. ^ http://biz.yahoo.com/bw/080410/20080410005358.html[dead link]
  13. ^ McCarty, Dawn; Cotten Timberlake (2008-02-20). "Sharper Image, Lillian Vernon File for Bankruptcy as Sales Slow". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601087&sid=a4POsRTDai0g&refer=home. Retrieved 2008-02-20. 
  14. ^ "Sharper Image files for Chapter 11 bankruptcy". Reuters. 2008-02-20. http://www.reuters.com/article/companyNewsAndPR/idUSN2034611020080220. Retrieved 2008-02-20. 
  15. ^ "Investment firms win Sharper Image in bankruptcy". Reuters. 2008-05-29. http://www.reuters.com/article/fundsFundsNews/idUSN2931519320080529. Retrieved 2008-07-21. 
  16. ^ Fredrix, Emily (2009-07-01). "Meltdown 101: Shuttered stores' sites still sell". The Guardian. http://www.guardian.co.uk/world/feedarticle/8587334?FORM=ZZNR2. Retrieved 2009-11-10. 
  17. ^ Kavilanz, Parija B. (2009-04-26). "Brands of defunct retailers making a comeback - Apr. 26, 2009". Money.cnn.com. http://money.cnn.com/2009/04/26/news/companies/retail_deadbrands/index.htm. Retrieved 2009-10-20. 
  18. ^ "Camelot Venture Group and Sharper Image Join Forces". Camelot Venture Group. 2009-08-07. http://www.camelotventures.com/news-09-sharperimage.html. Retrieved 2009-11-10. 
  19. ^ "Sharper Image pays $525,000 to end lawsuit against CU". http://www.consumerreports.org/cro/appliances/heating-cooling-and-air/air-cleaners/sharper-image-lawsuit-ends-505-air-purifier-ionic-air-cleaner/index.htm. Retrieved 2007-08-09. 
  20. ^ Barrett, Stephen. "Court Dismisses Sharper Image Lawsuit against Consumers Union". http://www.quackwatch.org/14Legal/ionicbreeze.html. Retrieved 2008-03-05. 
  21. ^ "Consumer Reports calls air purifier ‘unhealthy’". http://www.msnbc.msn.com/id/7391185/. Retrieved 2007-08-09. 
  22. ^ "Sharper Image Ionic Breeze Air Purifiers Are the First to Feature OzoneGuard". http://findarticles.com/p/articles/mi_m0EIN/is_2005_July_25/ai_n14815944. Retrieved 2007-08-09. 

[edit] External links

Retrieved from "http://en.wikipedia.org/wiki/The_Sharper_Image"