Corporate Obituaries: The Sharper Image

The Sharper Image is no more: No longer will consumers be able to buy air purifiers, Trump Steaks and massage chairs in a single place.

On February 19, 2008, the high-end tchotchke-and-gizmo retailer died and was interred in Chapter 11 bankruptcy. It was 31, and is survived by a bevy of creditors.

A great deal of grief and a soupcon of schadenfreude met news of its death: The Sharper Image, with its commitment to sheer, pointless extravagance, embodied the bull market more than any other retailer.

The company was born in 1977, when founder Richard Thalheimer started a catalogue selling jogging watches. Within 2 years, Thalheimer had made his first million. At its peak, The Sharper Image had some 184 locations across the US.

And who can forget the cornucopia of uselessness that once peppered its eponymous stores - from the infrared toy cars to the 17-in-1 personal groomers (with no prizes given to those who could think of 17 kinds of personal grooming). Many customers were left wondering -- albeit while frantically pulling out their credit cards -- just what the hell one was supposed to do with an animatronic puppy, anyway.

While repeat business on $5,000 massage chairs wasn’t quite as voluminous as management had hoped, the credit crunch alone didn’t kill The Sharper Image. No - the death blow was dealt by consumer watchdogs, and by the faithless consumers themselves.

The trouble started in 2003, when Consumer Reports published a scathing indictment of the Ionic Breeze air purifier. The Sharper Image, which tried to distinguish itself from its competition (such as Best Buy (BBY)) by carrying distinctive, high-end items not available elsewhere, tended to make large bets on relatively few products, of which the Ionic Breeze (sticker price: $325) was one.

Consumer Reports took a sledgehammer to the Ionic Breeze (and thus to Sharper Image): Not only didn’t it work, the magazine said, it also spewed potentially toxic doses of ozone into the rarefied homes of those who bought it.

When the story appeared, The Sharper Image filed -- and promptly lost -- a libel suit against Consumer Reports, and was subsequently forced to pay $525,000 in legal damages.

By then, the vultures were circling. Investors turned around and leveled a class action lawsuit against The Sharper Image, claiming fraud. The stock plunged when the company’s attempt to settle the lawsuit was rejected in October 2007; soon, many suppliers were demanding cash payments upon delivery, leaving the retailer with precious little liquidity.

Bankruptcy was perhaps inevitable.

In lieu of flowers, the company’s survivors ask you send something suitably, bafflingly overpriced - provided it’s utterly useless.