Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
After nearly two years of poor financial performance, Sharper Image said today that founder Richard Thalheimer has stepped down as chairman and CEO, replaced by former American Household CEO and turnaround expert Jerry Levin.
Following nearly two years of poor financial performance, Sharper Image Corp., No. 87 in the Internet Retailer Top 500 Guide to Retail Web Sites, said today that founder Richard Thalheimer has stepped down as chairman and CEO, replaced by former American Household Inc. CEO and turnaround specialist Jerry Levin. By mid afternoon today, Sharper Image’s stock was up more than 6% to about $10.
For Thalheimer, who founded Sharper Image in 1977, the change marks the end of a 30-year period during which he built Sharper Image into one of the most effective and innovative multi-channel retailers, selling across four channels of web, TV, catalogs and stores.
Levin, a member of Sharper Image’s board who is also a former top executive of Revlon Inc. and The Coleman Co. Inc., is expected to help the retailer of innovative and high-tech products return to profits, the board says. “With his extraordinary integrity, experience and business acumen, we are confident that Jerry is the ideal person to ensure a smooth transition and lead our efforts to strengthen the business, put the company back on the path to profitable growth and create shareholder value,” the board says. The board has also retained for one year Levin’s company, JW Levin Partners LLC, which specializes in rebuilding consumer brands.
Levin has his work cut out for him. Sharper Image has been reporting declining sales, both on the web and totally, since early 2005, and last week said that it expects to report a 22% drop in revenue for the second quarter ended July 31, to $107.2 million from $137.3 million a year ago.
The company recently announced that it had to delay the filing of its financial statement for the second quarter ended April 30 pending its review of stock option practices-a move that left it out of compliance with requirements for continued listing on the NASDAQ stock market. It remains listed on the NASDAQ pending a review by the NASDAQ Listings Qualifications Panel.
Sharper Image also said last week that it would restate its financial statements for the three fiscal years leading up to January 31, 2006, and for the quarters ended April 30, 2005, and April 30, 2006, to reflect a charge associated with the issuance of stock options.
Thalheimer will remain on the company’s board, a spokesman says. “The success of Sharper Image in the past has been due to Richard and his vision, and we are grateful for his contributions and many years of service,” the board said in a prepared statement. “We wish him well in his future endeavors.”
The multi-channel retailer, which designs many of its own products like its Ionic Breeze fan-less air purifier, sells through SharperImage.com, TV infomercials, catalogs and about 175 stores. After starting off to a great year in 2004, with first-quarter sales rising 58% year-over-year and SharperImage.com being named that fall to Internet Retailer’s Top 50 Best of the Web for 2005, the retailer ran into steadily declining sales.
Web sales, long a major source of growth, started to slow in the fourth quarter of 2004, and nearly all quarters since then have shown declines in online sales.
Web sales for the first quarter ended April 30, the most recent figures available, fell 26% to $17.2 million from $23.2 million in the year-earlier period, following an 11% decline in Q1 2005 from $26.2 million in Q1 2004. In 2004’s first quarter, however, web sales had surged 58% from Q1 of 2003.
Thalheimer and Levin were unavailable for comment. Michael Kalb, a managing director of Sun Capital Securities Group, a unit of Sun Capital Partners Inc. that owns a stake in Sharper Image, says Sun Capital is optimistic about Levin’s ability to turn things around. “We know Richard Thalheimer and believe he did a great job of building the business, and we also know Jerry Levin and are optimistic that he can take the company in a profitable new direction,” Kalb tells Internet Retailer.
Levin has also worked in several executive roles at Pillsbury Co. and serves on the boards of Wendy’s International Inc., U.S. Bancorp and Ecolab Inc.