The Sharper Image

Sharper Image
Subsidiary
Fate Bankruptcy
Founded San Francisco, California 1977
Defunct 2008, relaunched 2010
Key people
 David Katzman,
Managing Partner, Camelot Venture Group
Parent Iconix Brand Group
Website www.sharperimage.com

Sharper Image is an American brand that offers consumers home electronics, air purifiers, gifts and other high-tech lifestyle products. Originally founded in 1977, the brand was relaunched in 2010 with an updated catalog and website, SharperImage.com. The catalog and website are currently owned and operated by Michigan-based Camelot Venture Group.[1]

The earlier consumer products retailer by that name was founded by Richard Thalheimer and was in business from 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, along with business-to-business sales teams which marketed 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.[2] At that time 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 Consumer Capital, Infinity Lifestyle Brands, Gordon Brothers Group and Bluestar Alliance,[3] after which the brand name was licensed for use on products sold through third party retailers such as Best Buy and Bed Bath & Beyond or through the branded website. New products are created through partnerships with other businesses.[4]

Iconix Brand Group bought The Sharper Image in 2011.[5]

History

The Sharper Image Corporation was the brainchild of Richard Thalheimer. The company started as a catalog business to sell jogging watches.[6]

In 2006 there was a change in the board of directors of the company, including the removal of Thalheimer as CEO.[7] Thalheimer was replaced by Chairman Jerry W. Levin, who was formerly Chairman and CEO of American Household/Sunbeam, Coleman, and Revlon, and under whom Sunbeam Products/American Household had filed for bankruptcy in 2001.[8]

On April 9, 2007, Steven A. Lightman became the President and CEO.[9] In May 2007, the company announced the hiring of Rebecca Roedell as Chief Financial Officer.[10]

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.[11] On February 8, 2008, 11 days before he announced the Sharper Image bankruptcy filing, 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.[12][13]

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. But, as was pointed out, "Levin hasn't made a lot of money for the investors of Sharper Image he's teamed up with so far, including hedge fund Ramius Capital, which helped bring him in as a director, and Clinton Group, which announced a large stake in December."[14] Under Levin, the company's stock price had fallen from about $40 three years ago to about 23 cents (a "paltry" $3.6 million market capitalization) at the time of his departure, on the over-the-counter pink sheets.[15] His group's bid did not succeed.[16]

In May 2007, 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.

Bankruptcy

On February 19, 2008, The Sharper Image stock reached a then-record 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.[17] Cash on hand totaled about $700,000.[18]

On May 29, 2008, a joint venture led by units of private investment firms Hilco Consumer Capital Corp. Infinity Lifestyle Brands 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.[19]

Post-bankruptcy

The Sharper Image name was licensed as a product brand, by a joint venture between Hilco Consumer Capital, Infinity Lifestyle Brands, Gordon Brothers and Bluestar Alliance.[20][21] The brand is used to sell products through third party retailers, including Best Buy, Bed Bath & Beyond, OfficeMax, and Big 5 Sporting Goods.[4]

In August 2009, Camelot Venture Group secured the rights to operate a new Sharper Image catalog and website, SharperImage.com. In 2011, Iconix Brand Group bought the Sharper Image brand,[5] while Camelot Venture Group continued to operate the catalog and website. In June 2014, Camelot Venture Group acquired the consumer-facing division of the brand (catalog and e-commerce) from Iconix. Presently, Camelot Venture Group continues to grow the Sharper Image brand through increased catalog circulation, consumer promotions and heightened presence on social media.

Advertising and business

The Sharper Image's advertising budget was primarily directed to its monthly catalog for about the first 20 years of its existence.[22] 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. This move boosted sales, but led to confusion between prices advertised on television and those marked in the retail stores.

The company was 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.

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.[23] 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."[24]

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.[25] As a result, sales plummeted, and the stores took back units, even ones that were 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.[26]

References

  1. ↑ "About Us." The Sharper Image. Retrieved on February 18, 2010.
  2. ↑ Krantz, Matt (2008-02-21). "Sharper Image files for Chapter 11 bankruptcy protection". USA Today. Retrieved 2008-02-20.
  3. ↑ Chasan, Emily (2009-10-18). "Linens 'N Things returns to Home Outfitters stores". Forbes. Retrieved 2009-11-10.
  4. 1 2 Taub, Eric (2009-01-18). "Sharper Image Stores Are Dead, but the Brand Goes On". New York Times. Retrieved 2009-11-10.
  5. 1 2 "Iconix acquires The Sharper Image brand".
  6. ↑ Liedtke, Michael. "Sharper Image founder Thalheimer is removed as CEO". The San Francisco Chronicle. Retrieved 2007-08-09.
  7. ↑ Kim, Ryan (2006-09-27). "Sharper Image axes chief executive". The San Francisco Chronicle. Retrieved 2007-08-09.
  8. ↑ "Jerry W. Levin". Retrieved 2007-11-07.
  9. ↑ "Sharper Image Appoints Steven A. Lightman President and Chief Executive Officer". Business Wire. 2007-03-26. Retrieved 2007-08-09.
  10. ↑ "Sharper Image Hires Rebecca Roedell As CFO; Roedell To Replace Interim CFO Daniel Nelson — Update". Retrieved 2007-08-09.
  11. ↑ "Biography of Jerry W. Levin". Retrieved 2008-09-01.
  12. ↑ "SPAC IPO FILING: JWL Partners (JWL, SHRP)". February 11, 2008. Retrieved 2008-09-01.
  13. ↑ "Initial Public Offerings (IPO): Business description of JWL PARTNERS ACQUISITION CORP.". Retrieved 2008-09-01.
  14. ↑ WHITEHOUSE, KAJA (April 11, 2008). "SHARPER IMAGE EYED BY EX-CHAIR". The New York Post. Retrieved 2008-09-01.
  15. ↑ http://customwire.ap.org/dynamic/stories/S/SHARPER_IMAGE_CHAIRMAN?SITE=SLWIJ&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-04-10-09-10-53
  16. ↑ http://biz.yahoo.com/bw/080410/20080410005358.html
  17. ↑ McCarty, Dawn; Cotten Timberlake (2008-02-20). "Sharper Image, Lillian Vernon File for Bankruptcy as Sales Slow". Bloomberg. Retrieved 2008-02-20.
  18. ↑ "Sharper Image files for Chapter 11 bankruptcy". Reuters. 2008-02-20. Retrieved 2008-02-20.
  19. ↑ Chasan, Emily (2008-05-29). "Investment firms win Sharper Image in bankruptcy". Reuters. Retrieved 2008-07-21.
  20. ↑ Fredrix, Emily (2009-07-01). "Meltdown 101: Shuttered stores' sites still sell". London: The Guardian. Retrieved 2009-11-10.
  21. ↑ Kavilanz, Parija B. (2009-04-26). "Brands of defunct retailers making a comeback — Apr. 26, 2009". Money.cnn.com. Retrieved 2009-10-20.
  22. ↑ "Morningstar Document Library". Doc.morningstar.com. Retrieved 2011-06-30.
  23. ↑ "Sharper Image pays $525,000 to end lawsuit against CU". Archived from the original on August 6, 2007. Retrieved 2007-08-09.
  24. ↑ Barrett, Stephen. "Court Dismisses Sharper Image Lawsuit against Consumers Union". Retrieved 2008-03-05.
  25. ↑ "Consumer Reports calls air purifier 'unhealthy'". Retrieved 2007-08-09.
  26. ↑ "Sharper Image Ionic Breeze Air Purifiers Are the First to Feature OzoneGuard". Business Wire. 2005-07-25. Retrieved 2007-08-09.

External links

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