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Once a multi-channel star, Sharper Image files for bankruptcy
Sharper Image Corp., which built a strong reputation as an innovative multi-channel retailer after launching more than 30 years ago, buckled under the pressure of competition and filed for bankruptcy protection last month. It intends to conduct business as usual while working on a reorganization plan executive by new CEO Robert Conway, a turnaround specialist.
Following its launch more than 30 years ago, Sharper Image Corp. built up a strong reputation as both a retailer of innovative products and an innovative merchant that blazed its way into selling through multiple channels-stores, catalogs, TV and the web. By 2004, its Internet sales alone were more than $100 million.
But last month, just a week after firing its chief executive and appointing a new turnaround specialist as the next CEO, Sharper Image filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.The company has faced ongoing market pressures that have caused total sales to steadily decline and web sales to shrink to $85 million last year.
Sharper Image intends to conduct business as usual while it devotes time to resolving its operational and liquidity problems and develops a reorganization plan executed by new CEO Robert Conway, a founding member of retail turnaround firm Conway, Del Genio, Gries & Co.
Even though the web is a weaker channel for Sharper Image, the Internet and e-commerce will play a pivotal role in any attempt at a corporate turnaround, says one retail analyst.
“When they emerge from bankruptcy, they are going to have to do a better job of reacquiring and targeting customers who want their higher-end gadgets and only the Internet will do the best job of that for them,” says Jim Okamura, senior partner at retail consulting firm J.C. Williams Group Ltd. “The turnaround is not going to come from more traffic to their mall stores, which is very high priced real estate.”
The change in CEO is the second in less than a year for Sharper Image, which previously named Steven Lightman as CEO in March 2007 to replace long-time company founder and top manager Richard Thalheimer.