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Sharper Image Reports Lower Sales, Higher Loss

6/09/2006 09:59:00 AM Eastern

San Francisco — Sharper Image reported on June 9 a higher loss and lower revenues for its first fiscal quarter, ended April 30.

The specialty retailer reported revenues on for the first quarter of $106.8 million, 26 percent lower than last year’s $144.9 million. The net loss for the first quarter was $12.6 million, almost three times the loss of last year’s first quarter, $4.6 million.

Total store sales for the first quarter decreased 28 percent to $56.8 million from last year's $78.3 million. Com-store sales were down 29 percent for the first quarter. Total catalog/direct marketing sales for the first quarter dropped 16 percent to $23.5 million from last year's $27.9 million, while internet sales for the quarter slipped 26 percent to $17.2 million from last year's $23.2 million.

And the retailer reported that wholesale sales for the first quarter decreased 45 percent to $6.5 million from last year's $11.8 million.

During the first fiscal quarter, Sharper Image reported it opened two new stores, closed one store at lease maturity and remodeled one existing store.

“The first quarter's operating results reflect a continuation of previously discussed trends, especially weaker revenues from our Ionic Breeze line of air purifiers, and massage chairs,” said Richard Thalheimer, founder, chairman and CEO.

“We have given significant attention to improving our advertising return on investment, and we were pleased to see increased advertising productivity in the quarter. Although we've meaningfully reduced overhead and advertising expenses, we now must achieve an improvement in our revenue trends,” Thalheimer said.

He added that the chain needs to “build top-line sales growth with a significant amount of exciting new products, and we have begun this process in earnest. Our new product introductions have started flowing into the retail stores, catalog and online, and this season's Father's Day catalog showcases 45 new products.”

Thalheimer added, “Improving the company's operating performance is a work in progress, and products will continue to be introduced every week, and in significant numbers, as we ramp up toward the Holidays. Our customers will see a real change when they walk in to our stores, and my expectation is that this will slowly but steadily improve our sales and operating trends in the second half of the year.”

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