RE-SHARPENING THE IMAGE OF A LEFT-FOR-DEAD BRAND
Sharper Image plunged into liquidation shortly after filing for bankruptcy in February, closing all its nearly 200 stores. But investment arms at some of the firms involved in the liquidations snapped up the rights to Sharper’s intellectual property on the cheap, and now hope to profit on its rebirth.
A new Web site for “The Sharper Image” has just launched, reconnecting consumers with a familiar line of quirky gadgets: nose-hair trimmers, hand-held massagers, and, yes, the air purifiers that accounted for a big chunk of the retailer’s sales but suffered amid a Consumer Reports article questioning their safety and effectiveness. Customers no longer can visit standalone stores in malls with massage chairs. But at sharperimage.com, they can get a glimpse of the brand’s attempted reboot. Shoppers can buy gadgets online and watch short YouTube videos demonstrating products. Time will tell whether an online video of a man using a hand-massager on his back does the trick.
Web surfers are greeted by a slide-show of products, and a headline: “The New sharperimage.com. The Iconic brand returns…” Basic tabs denoting product categories line the top and left side of the page, with highlighted photos of massagers, stereos and media players at the bottom.
Sharper Image also plans to place products in such stores as Best Buy, J.C. Penney and Bad Bath & Beyond. They will be competing alongside other companies’ products, through licensing agreements. It works this way: Sharper Image reaches deals with certain manufacturers to pump out products with the Sharper Image moniker on them. The manufacturer then ships those products to retailers to spread the Sharper Image brand.
HoMedics, for instance, reached a $540 million deal to make iPod docking stations, wireless speakers and other gadgets for Sharper Image.
A joint venture of Hilco Consumer Capital, Gordon Brothers and Bluestar Alliance bought Sharper Image’s rights out of bankruptcy for $49 million. Just two years ago, Sharper Image posted sales of about $375 million. “We bought this company that was in bankruptcy and…fast forward basically a year-and-a-half later, the company now has 28 licensees,” said James Salter, Hilco Consumer Capital’s chief executive.
Salter says Sharper Image can post $1 billion in sales in just a few years, an ambitious goal that would more than double its performance before it tumbled into bankruptcy. Salter says the Web should account for about 10%-15% of sales and the company should reap sales around $500 million next year.
Consumers showed some affinity for Sharper Image’s quirky displays. But didn’t it go down in part because not enough people bought their goods? Salter and others are banking on consumers’ love of the brand and exposure to re-badged goods in well-trafficked stores.
“Every day we get calls from many customers saying: ‘Where can I find one of your stores?’” says Federico de Bellegarde, Sharper Image’s vice president of licensing. “I think people…may or may not know about the change of ownership.” Bellegarde said Sharper Image has maintained loyal customers and high rent costs were a big factor pushing the company into bankruptcy.
Other brands have had some success attaching themselves to products and moving off the shelves. The Polaroid name, for instance, has been slapped on flat-screen TV sets and sold at big-box stores.
Mike Spector
The Wall Street Journal
Mike Spector
The Wall Street Journal
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