Sharper Image files for bankruptcy, to close 90 stores

[dmx10101]

Sharper Image 'Breezes' into bankruptcy

The Sharper Image filed for Chapter 11 Bankruptcy last week after several years of declining sales and image problems related to one of its best-known products.

The 184-store chain received a $35 million loan from Wells Fargo Retail Finance to reorganize and plans to close about 90 stores. In its bankruptcy filing, the chain reported $199 million in debts and $251 million in assets. It also posted an 11% decline in same-store sales in January and a 23% drop in revenue.

Sales have been declining at Sharper Image since 2004 and profits have fallen four straight years. The chain, which was founded in 1977 as a catalog retailer of high-end electronic gadgets, was also hit hard by declining sales of its Ionic Breeze and pending lawsuits.

Air purifiers once accounted for a quarter of its sales until a Consumer Reports story said some Ionic Breeze models emit small amounts of ozone. Sales have plummeted since then and the company is facing lawsuits from consumers and investors in California and Florida.

RT Analysis...
Even though initial plans call for closing about half its stores, The Sharper Image will probably shutter most, if not all, of them given the economy and a retail landscape that's tough on specialty retailers.

The chain that specializes in high-end electronics has failed to turn a profit since 2004 and has watched sales slip steadily for four years. A soft economy has been to blame along with litigation and image problems related to the Ionic Breeze.

Ever since Consumer Reports published a story that raised serious questions about the Ionic Breeze, Sharper Image has fought a losing battle for damage control. It sued Consumer Reports - and lost - in 2005 and most recently had its attempt to settle a related lawsuit in Florida rejected.

In the long run, Sharper Image will probably maintain a retail presence in a few upscale markets on the West Coast and return to its roots as a catalog retailer on the Internet. And, once the lawsuits are settled, watch for it to dump the albatross known as the Ionic Breeze.

[XISMZERO]

Sharper Image pulled out many malls in my area by the mid-late 90s. I kind of thought they were dead or dying already -- trafficking in either overpriced or cheaply made stuff you can find elsewhere. Sharper Image was kind of a 1980s fad gadget store with prices in the nosebleed. Kind of lost it's specialty angle.

Guess they never adapted like Brookstone did but then again, where else can you find a electric, vibrating nosepicker thingy.......

[store215]

I suspect we are gonna see a lot more of these little cheesy mall boutique stores closing down this year...especially with the very poor economy.