A major shareholder of Sharper Image Corp. on Thursday set out to oust the company’s board of directors in a bid to retool the ailing retailer of high-tech gadgets and other offbeat merchandise.
The proposed shake up boosted the company’s sagging stock price by more than 22 percent.
The Knightspoint Group, which recently acquired a 12.8 percent stake in Sharper Image, hopes to replace the San Francisco-based company’s seven-member board with a slate that includes veteran executives and retailing consultants.
It marked the second time in the past two weeks that Knightspoint has sought to overhaul a company’s board. The group wants Ashworth Inc., a maker of golf apparel, to add three more directors.
The looming showdown over Sharper Image and its 192-store chain, would culminate with a shareholder vote at the company’s annual meeting, usually held in June.
The rebellion threatens to topple Sharper Image’s longtime chief executive, Richard Thalheimer, who started the company in 1977 to sell a lightweight watch for joggers. Thalheimer’s father, Alan, also has been on the company’s board since 1981.
Knightspoint Group’s director nominees include a candidate, Jerry W. Levin, who says he is prepared to take over as Sharper Image’s CEO. Levin previously has been CEO at Revlon Inc., Sunbeam Corp. and the Coleman Co.
“Sharper Image is a great consumer brand,” Levin said Thursday. “However, the company’s results have demonstrated that its strategy has stagnated.”
Sharper Image spokeswoman Suzie Stephens declined to comment Thursday, saying the company’s board was still evaluating how to respond to Knightspoint.
Thalheimer, 58, owns nearly 20 percent of Sharper Image’s stock, making him a formidable obstacle to Knightspoint’s challenge.
But Wedbush Morgan Securities analyst Joan Storms predicted other Sharper Image shareholders will be receptive to Knightspoint’s revolt because the company stock has dropped by more than 65 percent during the past two years.
The stock market’s initial response was positive as Shaper Image’s shares surged $2.25, or 22.6 percent, to close at $12.21 on the Nasdaq Stock Market. The stock has traded between $8.75 and $17.30 over the past year.
Through the first nine months of its current fiscal year, Sharper Image had lost nearly $22 million, deteriorating from a loss of $1.7 million in the previous year. In a more telling indication of its health, Sharper Image’s sales at stores open for at least a year had slipped by 16 percent in its fiscal year ended in January.
“They have been through some tough times before, but this is by far the worst,” Storms said.
In its early years, Sharper Image became known as a high-tech novelty shop that catered to mostly high-income consumers, but the stores began to gain more mainstream appeal in the late 1990s as the company developed more unique products priced under $100.
But Sharper Image has suffered in recent years, partly because of a lessening demand for the air purifying systems that had been one of its top-selling products for years. Consumer Reports dealt a significant blow to Sharper Image’s “Ionic Breeze” line several years ago when it derided the products as ineffective, triggering a legal fight that the company ultimately lost.