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The Sharper Image filed for Chapter 11 Bankruptcy last night, after three years of overall losses, poor consumer confidence, and ongoing litigation concerning the usefulness of its Ionic Air Breeze air purifier. As a result, you might soon lose the option of waiting for your girlfriend or mom by playing with the store's latest stainless steel coffee maker or by taking a nap in their ‘massage’ chairs.
The Sharper Image has been a staple in malls across America for many years, but the majority of the items the brick-and-mortars offered never seemed to be useful enough, or quite cool enough, to be considered absolute must-haves and move people into buying them. And the good stuff they did have always seemed to be priced cheaper elsewhere. Other than the oddly popular massage items, and the line of purifiers, you didn't think about The Sharper Image when thinking about buying your next gadget or tool.
According to Reuters, the filing detailed The Sharper Image's assets at $251.5 million and its debt at $199 million, as of January 31 of this year. By filing for Chapter 11, the directors of the company have a chance to keep it alive (and keep the doors of some or most of its stores open), through a possible $60 million loan from Wells Fargo Retail Finance LLC. CFO Rebecca Roedell admitted that the company was in “a severe liquidity crisis," and that “the company has suffered from increased competition, narrowing margins, litigation, lower consumer and market confidence, tighter credit from suppliers, and poorly performing stores.”
The Shaper Image was hit with a class-action suit that argued that their Air purifiers did not work as expected, and a federal court denied a preliminary settlement last October.
Source: Reuters
