Sharper Image Pierces Through Retail Gloom
Sharper Image Corp. is looking, well, sharper than most of the retail pack.
The San Francisco-based purveyor of unusual gifts and gadgets said Thursday that December same-store sales rose a healthy 7% through Christmas Eve, reaching the high end of its expectations. The chain store operator also said Internet sales exceeded its projections, jumping 68%.
Investors were pleased. Sharper Image shares jumped 18%, or $2.79, to $18.54 in Nasdaq trading Thursday.
The company’s announcement came amid more signs that Chistmas hasn’t been very merry for most of the rest of the retail sector.
For instance, Wal-Mart Stores Inc. on Thursday trimmed its December sales forecast for the second time in recent weeks. The dreary news from the world’s largest retailer was, for some, a bit like learning there’s no Santa Claus.
“They are the epitome in retailing,” said Matthew Kaufler of Clover Capital Management. “If they are feeling it, it’s a pretty tough environment.”
Tracy Wan, Sharper Image’s president, figures that her company is “bucking the trend” because of its unusual product mix. Among its hottest sellers: noiseless air purifiers, personal robots and “electronic locaters” to help people find their keys and other lost items.
Counting both new outlets as well as stores open for at least a year, monthly sales at Sharper Image through Dec. 24 were a record $111 million, up 28% over the same period in 2001. A strong close to the year is particularly important for the company because it is so reliant on Christmas business; it generally does not turn a profit until its fiscal fourth quarter.
Last year, Sharper Image earned $1.3 million after posting losses in each of its first three quarters.
Sharper Image has 127 locations nationwide, including 25 in California.
At the Sharper Image store in Newport Beach on Thursday, Ethan Wayne was back for some post-Christmas browsing. The semiretired 40-year-old said he had purchased nearly all of his holiday gifts at the store, including three scooters, four alarm clocks and five manicure kits. Now, he was looking to buy something for himself, testing a massage chair with a price tag of just under $3,000. “I’ll probably get one eventually,” he said.
For many retailers that sell more prosaic goods, meanwhile, it was a limp to the finish of what has been a brutal holiday selling race. Consider:
* In trimming its sales forecast, Wal-Mart conceded that improved business in the days before Christmas was “too late and too little” to allow the Bentonville, Ark.-based discounter to make its target for the five-week period ending Jan 3.
* The National Retail Federation and Bank of Tokyo-Mitsubishi said Thursday that 55% of the retailers they polled expect the industry’s fourth-quarter profits to be weaker -- or much weaker -- than last year’s. The slump was attributed in part to the inability of stores to raise prices, a fact confirmed by the “50% off” signs proliferating at just about every mall in America.
* Despite the aggressive discounting, U.S. retail sales fell 11% between Thanksgiving and Christmas compared with last year, according to an estimate released by ShopperTrak RCT.
It is debatable, however, whether the two periods are directly comparable, given that the span between holidays had six fewer days this year. Some experts say people will have spent whatever they were going to, whatever the length of the season, while others believe sales have been hurt with fewer days to buy.
With the scent of bargains still lingering in the air, Southland shoppers returned to stores Thursday, eager to cash in gift cards or to find fresh markdowns.
Los Angeles resident Maxine Young, 70, shopped with her daughter at Fashion Island in Newport Beach, looking for shoes, Christmas tree ornaments and other goodies.
“We pick up a sweater here, a pair of pants there,” said Young, a retired education administrator. “You have to be open to the quest.”
But some were disappointed, saying pre-Christmas prices were as low or even lower than what they found in stores Thursday.
After buying a man’s suit at Robinsons-May before Christmas for $200, attorney Cori Ferrentino found that she would have to pay more to get another one the day after the holiday. The Newport Beach store was offering the same suit for $450, while throwing in a second suit at no charge, the 38-year-old Costa Mesa resident said.
At South Coast Plaza, well-heeled shoppers got some breaks as certain high-end stores that eschew pre-Christmas sales marked down merchandise while workers scraped fake snow off the windows. Jeweler Black, Starr & Frost, for example, cut the price of a $30,000 diamond ring in half.
*
Bloomberg News was used in compiling this report.
