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Sharper Image Cuts Costs

SAN FRANCISCO-After receiving a proposal to replace its board, Sharper Image takes drastic steps to lower its expenses.

By Dana Dubriwny | Updated on March 28, 2006

SAN FRANCISCO-Struggling innovative-product retailer Sharper Image Corp., known for its massage chairs and ionic breezers, is taking a thrifty approach to the coming year after receiving a damning proposal from Knightspoint Partners II, LP. The proxy solicitation, dated March 9, offered several strategic suggestions, including replacing the retailer’s board of directors.

“I respect the point of view that a strong and independent board is a vital asset,” responded Sharper Image CEO Richard Thalheimer late Monday, “and I am always interested to hear new and positive contributions to the company’s strategy. Accordingly, we are giving very serious attention to the Knightspoint proposal and their points of view.”

In addition to retaining JPMorgan to advise the company on the proposal, the company has outlined several strategic moves including Thalheimer’s voluntary 50% pay cut, and voluntary reductions in pay for many members of the company’s management team and the entire board of directors.

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