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Sharper Image Inks Product Development Deal

San Francisco – Specialty retailer Sharper Image has signed a multi-year licensing agreement with MerchSource, a Hong Kong-based developer, designer and supplier of consumer merchandise.

Under the agreement, MerchSource will produce proprietary electronic and gift products under the Sharper Image brand for broad distribution. The first products will be available as early as fall 2007.

John W. Spotts, Sharper Image’s senior VP, brand licensing, said, “Adding such an established partner to our licensing program demonstrates the strength of The Sharper Image brand. Electronics have been a key product category for [us] over the years and we now have the opportunity to expand our brand presence and capitalize on our name at a broader array of retail organizations across the U.S. and Canada.”

Mike Roberts, partner and co-founder of MerchSource, said, “This agreement with Sharper Image will allow us to differentiate our products at retail stores and gain sales velocity with existing accounts. The Sharper Image name creates excitement and will immediately connect with consumers in innovative electronics and gifts.”

The agreement is the second license signed by Sharper Image’s recently formed brand licensing division. The chain created the unit in February 2007 to enable leading manufacturers and retailers to license the Sharper Image brand across a broad range of product categories, and signed its first agreement in March with OfficeMax for home office furniture and accessories.

Sharper Image also provides licensing opportunities on other intellectual property, including patents and trademarks.

The chain, under a recently installed management team, is struggling to reverse a long-term decline in sales in earnings.

MerchSource, established in 2000, specializes in the design, development, and production of key consumer product lines. The company has offices in Hong Kong, Shanghai and Guangzhou, and currently imports more than one million units of merchandise on a monthly basis to its five distribution facilities located in California, Texas, Georgia, Illinois and New Jersey.