Upscale gizmo retailer The Sharper Image has filed for Chapter 11 bankruptcy protection blaming three straight years of losses on declining sales and problems stemming from its much-derided Ionic Breeze air purifiers.
According to court papers, the chain has been facing declining sales since 2004, and has posted losses during the last three fiscal years. As of January 31, the company claimed to have $251 million in assets and $1999 million in debt, with about $700,000 in cash on-hand. The company is seeking a $60 million loan arranged by Wells Fargo to keep operating.
The company blames of its woes on settlements from a pair of class actions suits filed over the company’s Ionic Breeze air purifiers. The company sold three million of the units, but was sued over claims the company misled consumers about the efficacy of the purifiers. Sharper Image claimed the units removed dust, pollen, and other particles from room air; the company consistently denied the allegations, but offered $19 million in merchandize credits to customer who’d purchased the units, and agreed to scale back its claims.
At its peak, Shaper Image operated nearly 200 stores in malls across the United States, offering gadgets and technologically-enhanced lifestyle accouterments. The company says it plans to continue operations while it works out the details of its bankruptcy financing.