Sharper Image: A Failed Retailer

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Sharper Image was founded by Richard Thalheimer, an American retailer that specialized in high-end electronics and gifts. Sharper Image had been in business since 1977 up until its bankruptcy in 2008, and at one point employed 2,500 people nationwide. The company had 184 locations nationwide, which represented close to 60% of the total company revenue. According to an article by the "San Francisco Chronical," Sharper Image filed Chapter 11, liquidating 96 of its stores, leaving only 88 stores still functioning under the company's ownership as of May 28th, 2008. As of August 23, 2008, all retail stores had been closed, and the company vacated its former corporate headquarters. What caused bankruptcy? Several factors.

According to an article by Mark Huffman, of consumerreports.com, "For the last few years, Sharper Image has suffered from a lack of liquidity, stemming from its legal action. The trouble began in 2003 when Consumer Reports published a report claiming the expensive Ionic Breeze air cleaners don't clean air. The magazine later claimed its tests showed that Sharper Image's Ionic Breeze Quadra Silent Air Purifier and four other units also release potentially unhealthy levels of ozone. Not only did the company lose the lawsuit against Consumer Reports, investors mounted a class action suit against Sharper Image, claiming fraud."

Not only did the lawsuit hinder Sharper Image's success so did the lack of consumer spending. High oil prices, high food prices, lack of employment and the collapse of the substantial housing bubble have all helped spark the ongoing financial crisis. Consumers just are not spending what they used to, they can't afford to. Causing numerous business to file bankruptcy :(

Citation:
1. Huffman, Mark. "Sharper Image Closing All Stores." 03 June 2008. Consumeraffairs.com. 02 Mar. 2009.

2. Colliver, Victoria. "Sharper Image wants to close 96 stores." 08 Mar. 2008. SFGate. 02 Mar. 2009 .