Sharper Image: How a Catalog Sold the Fantasy of Technology

The Sharper Image catalog: gadgets nobody knew they needed

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The first product was a $69 watch for joggers. Richard Thalheimer bought a full-page ad in Runner's World for it, a story The Hustle told in its 2024 history of the company. The ad starred his friend Walt Stack, a "legendary, fully-tattooed 70-year-old" who was known around San Francisco for a daily 17-mile run across the Golden Gate Bridge. The copy line read: "The only chronograph that keeps up with the amazing Walt Stack." The ad cost $1k and brought in $10k in sales.

The name was older than the watch. Thalheimer had been selling copier paper and toner, and he chose The Sharper Image "because I thought that my paper and toner would help people make good copies." The name stayed when the products changed.

The Sharper Image was founded in 1977 and grew into a $750M retailer with 200 stores, with Thalheimer as CEO until 2006. The first catalog went out in 1979. It held 25 items, including what Thalheimer calls the first cordless phone, answering machine and car radar detector. Mail order was changing in those years. Roger Horchow had launched the first luxury color catalog without a physical retail location, and Joe Sugarman was running the first-ever mail-order magazine ads. By 1979 Thalheimer's ads were working well enough that he launched a catalog of his own.

1979–1987: the catalog as the engine

Each issue of the catalog went to three million people, at a cost of $1.4M per mailing. Roughly 20% of Americans had a credit card at the time, and customers ordered by phone through a "1-800" number. In a small San Francisco office with a staff of five or six, a dozen orders were processed every 60 seconds.

The copy was plain. Thalheimer avoided superfluous adjectives and wrote about the features that made each product exceptional. He found products by working the Consumer Electronics Show from the edges. His method was to "go straight for the little booths, the people selling things nobody had ever heard of."

The prices ran from impulse buys to showpieces. A mini electric fan worn on a necklace cost $49 and sold 10k units a month. The Snore-No-More cost $59. A bulletproof raincoat cost $400 and a motorized surfboard $2,450.

By 1980 the company was making $12M a year. In 1984 circulation reached 42 million catalogs and sales reached $87 million. By 1985 sales were $100M. Hammacher-Schlemmer was already a competitor. Brookstone was then a garden and tool catalog, and it would later copy the "look and feel" of The Sharper Image.

Stores followed the catalog: the first opened at Jackson and Battery Streets in San Francisco in 1981. In 1985 Thalheimer pushed through a risky expansion of nine stores that cost about $5M. On February 2, 1987, The Sharper Image Corporation listed on the NASDAQ at $10 per share.

From the 1990s slump to bankruptcy

Between 1989 and 1991, sales fell by 28%. The press turned on the brand. The SF Examiner called it "the Donald Trump of specialty retailing" and added: "Nobody needs what they sell."

The recovery came from cheap products and the company's own designs. A gel shoe insert at $19.99 a pair became the company's best-selling product. In 1991 the company set up Sharper Image Design in Novato, California. Two dozen employees there produced 300-plus patents and 100 new products. The best known was the Ionic Breeze, a noiseless air purifier. It sold well despite its $229 price, and by the turn of the millennium it made up 45% of sales.

In 2000 Thalheimer found the Razor scooter at a toy fair in Hong Kong, brought it to the United States and sold a million in the first year. The Razor led The Sharper Image to the best performance in its 23-year history, and analysts began to describe the chain as "a one-product company." Sales passed $760M by 2003.

The catalog also moved online. Thalheimer first pitched an e-commerce platform to the board in 1995. In 1996 the online division's sales were 10 times those of the year before. In 1998 total sales were $241M: $79M came from catalogs and $5M from the web. The homepage in December 1998 was a redirect that took visitors to "our Internet catalog". Online sales later reached 30% of the company's revenues. Catalog Age magazine named The Sharper Image one of the "10 Best Catalog Concepts Ever," alongside Banana Republic.

The Ionic Breeze then turned into a liability. In 2002 Consumer Reports ranked it dead last in a feature on air purifiers and called it "ineffective." Thalheimer sued the magazine, and the suit was thrown out.

Knightspoint Partners, an equity fund from New York City, bought into the company's stock. The published figures for that stake disagree: 12% announced in April 2005, or 13% in the spring of 2006. Jerry Levin joined the board in June 2006. Thalheimer was fired that September, and Levin took over his office as interim CEO. Knightspoint set out to recast The Sharper Image as a general electronics retailer like Circuit City or Best Buy.

The June 2007 Father's Day catalog promoted a $1,000 "Trump Steaks" package on its cover. The steaks could not be bought online or from the catalog, and the promotion fizzled after two months.

On February 19, 2008, the company filed for bankruptcy protection in the U.S. bankruptcy court in Wilmington, Delaware. Published counts put the closures at 184 or 183 stores, and about 4,000 jobs were lost. The company's assets sold at auction for $49 million plus some contingent recovery. The bank creditors said its biggest asset was the brand name, and the name brought in the most money at the auction.

What outlived the stores: the catalog as the brand

In 2009 Camelot Venture Group secured the rights to run a new Sharper Image catalog and website. By January 2010 the site footer read "Operated by Camelot Venture Group under license." The same page still had a "Retail Store Locations" link, left over from the chain. Camelot relaunched SharperImage.com and the catalog in 2010.

Ownership then passed through several hands. Iconix Brand Group bought the brand and control of all licensing agreements in 2011, while Camelot kept running the catalog and website. In 2014 Camelot bought the consumer-facing division (catalog and e-commerce) from Iconix. In 2016 ThreeSixty Group bought the brand licensing rights from Iconix for $100 million, and it has grown the brand through the website and increased catalog circulation.

The catalog is still running. A free SharperImage.com catalog arrives within 7-10 days of signing up. Camelot SI LLC is the licensed operator of the website, and Camelot Venture Group invests mainly in direct-to-consumer companies, including online, catalog and retail businesses. The site also carries a disclaimer: products not labeled "Sharper Image" are not Sharper Image-branded products. Two older lines are still for sale: the Ionic Comfort Quadra Air Purifier by Sharper Image, and Razor Scooters & Bikes.

The assortment has drawn criticism: the odd gadgets have been "usurped by USB drives and motion-activated light bulbs." Thalheimer still keeps a suit of armor from the old catalog, a $2,450 item, at his Marin County home.

References

• Richard Thalheimer: History - founding year, peak scale, first catalog contents, mailing costs, sales figures, Brookstone and Hammacher-Schlemmer, stores, NASDAQ listing date, design lab, Ionic Breeze 45% of sales, Razor, online sales, Catalog Age honor, Knightspoint (12%, April 2005), Levin's June 2006 board seat and interim CEO role, Trump Steaks cover, bankruptcy, 184 stores, auction and brand name, later owners and licensing deals
• How one man built The Sharper Image into the world's wackiest gadget store (The Hustle) - Walt Stack ad cost and return, origin of the name, Horchow and Sugarman context, 1979 catalog launch, copy style, CES sourcing, product prices, order rate, IPO price, early-1990s slump, SF Examiner quotes, gel inserts, Razor and the "one-product company" concern, Consumer Reports and the lawsuit, Knightspoint (13%, spring 2006), September firing, electronics-retailer strategy, 183 stores, assortment criticism, the suit of armor Thalheimer kept
• Sharper Image: About Us - 1977 origin, Camelot's 2010 relaunch of the site and catalog, Camelot Venture Group's direct-to-consumer focus
• Sharper Image: Catalog Request - free catalog in 7-10 days, Camelot SI LLC as licensed operator, branded-product disclaimer, Quadra purifier and Razor still sold
• sharperimage.com, 12 December 1998 (Wayback Machine) - homepage redirected to the "Internet catalog"
• sharperimage.com, 3 January 2010 (Wayback Machine) - Camelot Venture Group operating under license, store-locations link