Retailer Sharper Image Corp has filed for Chapter 11 bankruptcy protection, citing declining sales, three straight years of losses and litigation involving its Ionic Breeze air purifiers. The San Francisco-based company filed for protection late Tuesday in U.S. bankruptcy court in Wilmington, Delaware. Sharper Image said it had $251.5 million in assets and $199 million in debt as of January 31, according to the filing. Cash on hand totaled about $700,000.
"Sharper Image is in a severe liquidity crisis," Chief Financial Officer Rebecca Roedell said in a separate filing. She said the company has suffered from increased competition, narrowing margins, litigation, lower consumer and market confidence, tighter credit from suppliers, and poorly performing stores.
"The foregoing has been compounded by the ever-tightening and volatile credit and financing markets," she added. Sharper Image has seen its sales decline steadily since 2004, and has posted net losses in fiscal 2005, 2006, and 2007. According to court papers, the electronics retailer also cited "negative publicity" from the litigation involving its Ionic Breeze air purifiers for its falling revenues. source
Do you have a Sharper Image gift certificate that you haven't redeemed yet? Since filing for Chapter 11 bankruptcy on Feb. 19, SI has suspended accepting gift cards and gift certificates while it's going through proceedings but don't worry, you're in luck. It turns out that Brookstone will be honoring Sharper Image gift cards and gift certificates and take 25% off, which is pretty cool. The catch is you won't be able to use it on Bose, Panasonic and Sony products. (source)
So, what's going to happen to the high-tech gadget shop? Well, Sharper Image shares ceased trading on the Nasdaq Stock Market on Friday because of concerns raised by the recent bankruptcy filing and after 3 years of sinking sales, management plans on closing nearly half of Sharper Image's 184 stores. (source)