One Product Paid for All the Fun
For a while one air purifier delivered close to 40 percent of the company's sales. When that product lost its good name, a chain of nearly 200 stores filed for bankruptcy in 2008.
The Chair You Sat In and Never Bought
You went in to kill time, not to buy anything.
The chair was there and it was free, so you sat down, and the rollers moved up your back while you pretended to consider it.
Around you the store hummed. A globe floated over a magnetic base, and a fake dog barked in a box.
In the corner stood a machine the size of a mailbox, silent, moving air you could not see.
You picked up the ball that lit up and put it back. You tried on the noise-canceling headphones.
Nobody rushed you. Nobody expected you to leave with a bag.
You walked back into the mall empty handed and felt like you had gotten away with something.
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The Store Was a Catalog You Could Walk Into
The name over the door was Sharper Image, and the playroom was the front of a mail-order business.
It started in San Francisco in 1977, when a young lawyer named Richard Thalheimer bought a shipment of runner's watches and sold them through an ad in a running magazine. The watches sold out. The catalog came two years later, and the stores came after that.
The gadgets on the floor were the show. The company was really a direct marketer, selling novelty through a catalog, a website, and stores that doubled as advertisements you could touch.
Quietly, one plain product came to carry the whole operation. It was not the floating globe or the massage chair. It was an air purifier, a tall silent tower that promised cleaner air with no filter to change.
At its height that single machine brought in almost 40 percent of the company's revenue. The store sold hundreds of playthings. One appliance paid for most of the room.
Free to Play, Priced to Keep
The model worked because the store cost the customer nothing to enjoy and cost the company little to fill with wonder.
People came for the toys and left with a gift, an impulse, a thing they had not known they wanted. The air purifier fit the pitch perfectly. It was demonstrated, not explained, and it sold at a price with room for real margin.
By the mid 2000s the company was posting roughly $750 million in sales across nearly two hundred stores. The catalog landed in millions of mailboxes, and the gadget store had become a fixture of the American mall.
The Day the Hit Product Lost Its Name
Then the product that carried the company got tested.
The magazine Consumer Reports rated the air purifier ineffective, and later warned it could produce ozone in the very room it was meant to clean. The company sued the magazine for libel and lost.
Sales of the one machine that held up the numbers began to fall. A business can survive a weak quarter. It has a harder time when the weak quarter lands on the single product that pays for everything else.
The rest of the floor could not fill the hole. The gadgets were fun, but most were cheap novelties anyone could find online for less, once the store had shown them what to want.
The Shelves Went Quiet
The losses ran for three straight years.
In February 2008 the company filed for bankruptcy. It had already agreed to settle a class action over the air purifier, offering credits to about 3.2 million buyers who had trusted the machine.
Reorganization financing fell through. Every one of its remaining 184 stores had closed by the end of that year.
The name was sold to a licensing group, and it went on as a label stamped on other companies' gadgets.
What the Floating Globe Could Not Cover
The real lesson sat in plain sight on the sales floor.
A store can look like a hundred small bets and rest, in truth, on one. Variety on the shelf is not the same as safety in the numbers.
One strong product can carry a company and hide how much depends on it. Take the product away, and the crowded shelves go quiet.
