Most observers agree that Sharper Image CEO Steve Lightman has what it takes to run a direct business. But he doesn’t have retail experience, and for a troubled chain with some 187 stores, this could be a problem. A key measure of a merchant’s health, Sharper Image’s same-store sales had plunged by 25% during its latest fiscal year ending in January 2007.
Chris Shannon, managing director for New York-based investment bank Berkery, Noyes & Co., has observed first-hand that some Sharper Image stores need work. “The weekend after Thanksgiving I happened to be in the mall and had some time to kill,” Shannon recalls. “I was in a [Sharper Image rival] Brookstone store, which was packed. Then I walked into a Sharper Image store, which had much less traffic.” Both stores carried many of the same products at similar price points, he notes.
Lightman says he has been trying to address retail by visiting a group of stores at least once a quarter. But it clearly may take some time before the workers in the trenches feel the effect of new leadership and a shift in strategies. Shannon notes that “the people working at Sharper Image were not very engaged with any of the customers. Although this may be an isolated example, it really struck me as a direct comparison of one retailer that was pursuing a potential sale and one that seemed like it didn’t really care.”