Tuesday, June 3, 2008

Sharper Image Closing All Its Retail Stores Amid Nationwide Rise in Bankruptcies

Sharper Image to Sell Stores - In April, I posted about the rise in retail bankruptcies, including Sharper Image, which filed for Chapter 11 bankruptcy in February. A bankruptcy court has approved Sharper Image's plan to liquidate all of its retail stores, though it will continue to operate through an online store, a catalog, and direct-to-retailer sales.

Decline Began in 2003 - Sharper Image's problems began in 2003 with Consumer Report's criticism of the effectiveness of Sharper Image's Ionic Breeze air purifier. Sharper Image filed an unsuccessful lawsuit against Consumer Reports, and Sharper Image was also targeted by a consumer class action lawsuit that it settled.

Commercial Bankruptcies Rise - Last month, there were 5,233 commercial bankruptcies, a rise of over 46 percent over the year-ago period, according to Reuters. Commercial cases include bankruptcy filings from companies, as well as individuals who indicate they are running a business.

Gift Card Restrictions - For gift card holders, Sharper Image currently requires consumers to buy products worth at least twice the value of the gift card in order to redeem the card. Because gift card holders have unsecured, low-priority claims in bankruptcy proceedings, retailers who declare bankruptcy may refuse to honor gift cards at all in some situations, as mentioned in this story.

Related Post: Retail Bankruptcies Rise


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