By Andria Cheng, MarketWatch Last update: 10:32 a.m. EDT Oct. 13, 2008NEW YORK (MarketWatch) -- Four months after exiting bankruptcy, Sharper Image has signed a deal that will migrate its brand name to thousands of stores at a variety of chains. Under a five-year licensing agreement valued at $540 million, HoMedics Inc., a maker of massage and footbath devices, will make products under the Sharper Image name in categories from men's personal care to home environment products and pay Sharper Image a percentage of its sales as royalty income, said Federico de Bellegarde, vice president of licensing for Sharper Image. The products will be available in stores late next summer and early next fall and will also be carried at other retailers such as J.C. Penney Co. though they won't be available at discounters, de Bellegarde said. "We made a strategic decision not to go to mass," he said in an interview, referring to discount retailers. Instead, retailers from Bed Bath & Beyond Inc to Macy's Inc. will be part of Sharper Image's revamped strategy. Sharper Image was purchased out of bankruptcy in May by a joint venture led by investment firms Hilco Consumer Capital, Gordon Brothers and Bluestar Alliance, with a strategy to license its label to other retailers and manufacturers. It's created a lab that invites inventors and patent holders to generate product ideas. In the last four months, the company has met with more than 150 suppliers and a dozen retailers about the possibility of licensing its name for different products, de Bellegarde said. "The enthusiasm we've received from so many retailers and distributors has been fantastic," he said. "Consumers are going to be more discriminating in this challenging environment. Folks are really looking for well-made products." Sharper Image also will consider licensing its name for online sales and may eventually consider going back to opening stores under its own brand, de Bellegarde said. Sharper Image, which had 192 stores and sales of $732 million in 2004, joined other specialty retailers such as Bombay Co. to file for bankruptcy protection, after the economic downturn and the collapse of the housing market curtailed discretionary spending. The investor group also acquired five existing licensing deals that Sharper Image had negotiated before it filed for bankruptcy protection earlier this year. These include an agreement with OfficeMax Inc. to sell a collection of small home and office furniture under the Sharper Image label. The company said it will also entertain licensing its name to other retailers.
Andria Cheng is a MarketWatch reporter based in New York.
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