Jerry Levin has resigned from Sharper Image as chairman and member of its board and has expressed interest in acquiring some or all of the company’s businesses or assets.
The retailer filed for Chapter 11 protection in February, claiming it was in a “sincere liquidity crisis.”
According to a release from the company, Sharper Image’s recently appointed CEO Robert Conway said the company would “give full consideration to any proposal that may be made to acquire the company’s business or assets.” The company also said that “there can be no assurances that such a proposal will be forthcoming.”
When Sharper Image filed for Chapter 11 in February it said it would close 90 of its 184 stores and sell off unprofitable inventory in an effort to conserve cash. It had total assets of $251.5 million and total debt of $199 million at the close of its most recent fiscal year, ended Jan. 31.
Sharper Image’s sales, earnings and stock market value have cratered over the past four years after its core product, the Ionic Breeze air purifier, was vilified by Consumer Reports magazine, resulting in numerous lawsuits. Meanwhile, indoor malls, the bastion of its store base, lost favor with shoppers, and its executive gift-type assortment was eclipsed by the advent of iPods, GPS devices and other popular and universally available portable CE products.
Also contributing to its woes were compressed margins and tighter credit terms from suppliers, the company indicated. It is seeking approval of a $60 million debtor-in-possession loan from current lender Wells Fargo to fund operations, and said Chapter 11 protection would allow it to sell off underperforming stores and free itself from unfavorable leases.
