What happened to Sharper Image?

Update 02/22: If you have a Sharper Image gift card laying around, beware that the merchant has stopped accepting them according to this report by Consumerist.

The Sharper Image LogoMy favorite leisure time store and the place where I redeem all my Discover Card rewards announced on Tuesday that it filed for Chapter 11 bankruptcy protection and will close 60 90 of its 183 stores nationwide. CNN Money has re-published a great story of success and decline at Sharper Image, a must read for every entrepreneur.

According to the article, the company’s strength was in the narrow niche they had taken with the kind of products that appealed to geek lovers around the country. You know, the $300 electric shavers and $1,999 massage chairs that bring very fat margins. That changed in late 80’s and what was their main strength became their main weakness.

We had gone public in 1987, and we were well known enough by then that we had a lot of counterfeit competitors. There were no fewer than about ten other catalogs and two retailers attempting to copy our formula. At the same time big category-killer stores were rolling out, big electronics stores that were copying a lot of the products that were our bestsellers.

Sharper Image had one more sunny day when in 1999 they started selling the famous Razor Scooter, a single product that brought them over $100 millions in sales. The overall strategy hasn’t changed though and over time has brought the company to a downfall.

I find this other quote by the founder Richard Thalheimer (also from the CNN Money article) very entertaining:

I knew that men were not good shoppers. So my idea was to write intelligent, informative advertising copy and put it in magazines that men enjoyed, like car magazines or flying magazines.

Guess what, Richard, you were wrong. Men are great shoppers. If they were not, I wouldn’t be writing about Sharper Image filing for bankruptcy protection on a blog primarily read by male bargain hunters. ;-)

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9 Responses to “What happened to Sharper Image?”

  1. 1 Adnan Raja Feb 23rd, 2008 at 10:07 am

    Do we know which stores are closing? You mentioned 60 out of 183 stores.


  2. 2 Tisha Feb 27th, 2008 at 6:50 pm

    I am an employee at the one of the Sharper images based in Hawaii,the public as well as The Sharper Images employees will be notified in about a week and a half from today about which stores will be closing.
    BTW 90 stores will be closing ,not 60.

  3. 3 Yan Feb 27th, 2008 at 9:32 pm

    Tisha, I am sorry to hear that. 90 stores is a lot of affected people. I hope you are at least offered some sort of compensation (severance package?).

  4. 4 Philly Mar 3rd, 2008 at 9:43 pm

    That’s bad for employees, but at least they can get another job. I can’t get another $75.

    The Grinch stole my Christmas!!

  5. 5 Mel Mar 4th, 2008 at 8:38 am

    There will be little or no compensation in my opinion. They have stopped paying severance to former employees until the chapter 11 is sorted out.
    The Grinch stole my job!!!

  6. 6 surfasclub Mar 8th, 2008 at 1:06 am

    As a longtime employee of Sharper Image, I am completely saddened by the downward spiral the company has taken the past three years. My sympathies are with the hundreds and hundreds of dedicated employees that will lose their jobs within the next six to eight weeks. Realistically, however, many of us had seen the writing on the wall for several years even during the company’s peak profit periods of 2000 through 2003. We imported thousands of cheaply made, low quality products from China, marked them up anywhere from two, up to five or six hundred percent and made a shameless profit from honest consumers who trusted our name brand and thought they were purchasing high quality products. The Ionic Breeze line has had questionable effectiveness and safety issues, and blatant misrepresentation from the company for years. I would expect more class action lawsuits to materialize, perhaps initiated from current and past TSI employees due to constant exposure to these units. During the peak selling years of this product, employees were exposed upwards to a dozen of these units operating in a single store for years. What are the potential health hazards of this heavy concentration of active units?
    I also recall that for over three years we prominently featured a “testimonial” book at the front-main display of the store that contained letters from so-called happy “customers” touting the praises of the Ionic Breeze product line. I always questioned the validity of these “letters” only because the terminology and writing style used in them fit too perfectly into the company’s business agenda and sounded more like advertisements written by the marketing department than actual customer letters. I am surprised that no government or consumer entity has looked into this to investigate the authenticity of these so-called letters. Additionally, I further began to question the integrity of the company when a 2005 catalog issue had several pictures of people on the cover, mostly stock photos, of happy, shiny people with a headline that implied how all of America loved the Ionic Breeze air cleaners. What was really disturbing is that one of the pictures featured was that of a physician. But this was no physician; it was the head of the company’s Visual Presentation department posing as a doctor on the front cover. I was completely disgusted. Whether this tactic was illegal or not was not my primary concern at the time. I needed my job and didn’t want create problems for myself by notifying my District Manager or my less than receptive HR Department to my concerns. However, what I began to realize was that this company possessed unscrupulous business practices in order to make as much profit as possible at the expense of the consumer’s trust. During the company’s heyday, there was a tremendous amount of arrogance and mismanagement at the upper and middle management levels. Concerns and input from the lower ranks, the people on the front lines and out in the field, were not taken seriously or they were either completely ignored. Many considered Mr. Thalheimer as a sometimes kind, yet boozy and out of touch control freak. He was notorious for insulating himself with a bunch of “yes men” within the company and was unreceptive or simply ill-equipped to alter the business structure in accordance with the changing retail climate.
    So now, four CEOs later, the dedicated employees that remain, or that are foolish enough to hang around, are left holding the bag and trying, in vain, to pick up the pieces. The plight of the
    Sharper Image is a valuable lesson in how horrendous mismanagement and the insatiable quest for profit can destroy a corporation.
    One could also call it karma.

  7. 7 Ro Sep 12th, 2008 at 1:38 pm

    I ordered something from sharper image with my rewards card in June. They have not sent me my product. What happened to my rewards card?

  8. 8 J Mendez Dec 22nd, 2008 at 10:10 pm

    I knew the company was on a downward spiral as soon as I noticed how the company’s management kept making foolish choices from top to bottom. I think they got what they had coming. I was a store manager way before the company started hiring so called educated collage people in key positions. This is what you get when you hire outside so-called smart people and do not look within first. The people within already care for the company so why hire crap from outside the company that could not care one bit about the companies financial health or more importantly its longtime employee base. I now own my own company and I left SI just in time before all the unnecessary pain. I had the pleasure of promoting certain people to management positions. I can tell you that the people I promoted would have yielded better results for the stability of SI then the fools that were over paid for nothing but killing the company.

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