News Flash!
Sharper Image files for chapter 11 bankruptcy
On February 20, 2008

NEW YORK (Reuters) – Retailer Sharper Image Corp has filed for Chapter 11 bankruptcy protection, citing declining sales, three straight years of losses and litigation involving its Ionic Breeze air purifiers.

The San Francisco-based company filed for protection late Tuesday in U.S. bankruptcy court in Wilmington, Delaware. Sharper Image said it had $251.5 million in assets and $199 million in debt as of January 31, according to the filing. Cash on hand totaled about $700,000.

Its shares plunged 92 cents, or 64 percent, to 52 cents on Nasdaq.

“Sharper Image is in a severe liquidity crisis,” Chief Financial Officer Rebecca Roedell said in a separate filing.

She said the company has suffered from increased competition, narrowing margins, litigation, lower consumer and market confidence, tighter credit from suppliers, and poorly performing stores.

“The foregoing has been compounded by the ever-tightening and volatile credit and financing markets,” she added.

Sharper Image has seen its sales decline steadily since 2004, and has posted net losses in fiscal 2005, 2006, and 2007.

According to court papers, the electronics retailer also cited “negative publicity” from the litigation involving its Ionic Breeze air purifiers for its falling revenues.

In October, a federal court denied approval of a settlement of class-action suits related to the efficacy of the air purifiers. The product was sold to 3 million consumers, according to a previous filing.

Following the ruling, Sharper Image’s stock fell 18 percent, weakening support from suppliers and choking working capital as creditors tightened or withdrew credit terms, according to court documents.

The company deals with about 650 vendors and suppliers on a credit basis, many of whom began to request cash upon delivery, according to court papers.

Sharper Image is seeking a $60 million loan arranged by Wells Fargo Retail Finance LLC to keep operating, according to the court papers.

The company said in a separate filing it replaced Chief Executive Steven Lightman with Robert Conway on February 14.

(Reporting by Jonathan Stempel and Justin Grant; editing by Jeffrey Benkoe)

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Urgent News About The Ionic Breeze Air Purifiers By Sharper Image

First reported –

Danger: Ionizing air purifiers impure
Shares of Sharper Image tumble 9% after Consumer Reports renews criticism of popular Ionic Breeze.
April 5, 2005: 6:14 PM EDT
NEW YORK (CNN/Money) – Shares of Sharper Image fell nearly 9 percent on Tuesday after Consumer Reports magazine renewed criticism on one of its popular air purifiers in its May issue.

The magazine, hitting newsstands on Tuesday, said that Sharper Image’s Ionic Breeze Quadra Silent Air Purifier and four other similar air purifiers fail to significantly clean the air — some can also expose users to potentially harmful ozone levels.

Consumer Reports said it tested ionizing air cleaners for ozone levels and for their ability to remove dust, cigarette smoke and pollen from the air, and Sharper Image’s Professional Series Ionic Breeze Quadra SI737 SNX is one of five products that was ineffective as air cleaners.

Four other models included Brookstone Pure-Ion, Ionic Pro CL-369, IonizAir P4620 and the Surround Air XJ-2000.

The magazine also said that people with asthma or respiratory allergies are especially sensitive to indoor ozone, an irritant that can worsen asthma, deaden the sense of smell, raise sensitivity to pollen and mold, and may cause permanent lung damage.

The May issue is being published only two months after Sharper Image agreed to pay the Consumers Union, publisher of Consumer Reports, $525,000 in legal costs after a federal judge dismissed a libel lawsuit alleging the publisher printed false information in an October 2003 article about the Ionic Breeze’s ability to reduce airborne particles.

“It is astonishing that Consumers Union would continue its misguided efforts to attack the judgment and experience of millions of Americans who are satisfied with the performance of the Ionic Breeze products,” Sharper Image’s lawyer E. Robert Wallach said in a statement.

But Consumer Reports said it stands behind its findings.

The magazine told CNN/Money that “it is ludicrous to suggest that the Consumers Union, the nonprofit publisher of Consumer Reports, ‘attacks’ consumers.” “(We) stand by its testing and reporting on air cleaners, (and it) has provided its expert, independent assessment of several air cleaners that claim to trap charged particles on oppositely charged plates.”

Sharper Image (Research) stock closed $1.36 lower, or down 8.7 percent, at $14.32 on the Nasdaq.

Ionizing air cleaners get zapped

By Elizabeth Weise, USA TODAY

Popular and expensive ionizing air cleaners — a staple of late-night infomercials — could expose users to lung-damaging levels of ozone, and they do a poor job of actually cleaning the air, according to a study in the May issue of Consumer Reports.
The magazine tested six popular ionizing cleaners and one HEPA (high-efficiency particulate air) filter. It found that two of the ionizing cleaners emit 150 to 300 parts per billion of ozone in samples taken 2 inches from the machine, while three other ionizing cleaners are in the 26-to-48-ppb range.

The Environmental Protection Agency’s standards for outdoor ozone concentration exposure is 80 parts per billion over eight hours.

“Anyone who has respiratory problems might think, ‘The closer I get this thing to my head while I’m sleeping, the better.’ Those people will be exposed to relatively high levels of ozone, which is not a good thing,” says Mark Connelly, the magazine’s director of testing.

“In normal people, exposure to ozone levels of 100 parts per billion causes injuries to the airways,” says Dean Sheppard, director of the Lung Biology Researcher Center at the University of California-San Francisco. “It also produces an effect in the airways of normal people that’s like what you see in people with asthma: shortness of breath and wheezing.”

Studies by researchers at UCSF and Yale University also have shown that even small increases in ozone are associated with reduced lung function and increased mortality rates.

Casey Fisher, president of Surround Air, which makes one of the models on Consumer Report’s “not recommended” list, disputed the results and says tests conducted by “an independent lab prove that the ozone level produced by the XJ-2000 is well beneath safety standards at as close as 1 foot away, and even less.”

The magazine found that five of the six ionizing cleaners don’t clean very well. “They were all ineffective in removing pollen, dust and smoke from air,” says Jeff Asher, the magazine’s technical director.

Robert Padgett of Brookstone says its Pure Ion air cleaner has “one of the highest clean-air delivery rates of any product in its class,” according to independent tests.

Doctors don’t recommend air filters for patients with allergies and asthma, says Sheppard. Animal dander especially isn’t readily removed by such filters because it gets caught in furniture or rugs, he says

But more than 80% of air cleaners are purchased become someone in the home has asthma or allergies, magazine editor Robert Markovich says. And ionizing air cleaners account for about 25% of the roughly $410 million Americans spend on air cleaners each year.

There is no government oversight over ionizing air cleaners. If the product is not making a medical claim, it doesn’t fall under the Food and Drug Administration’s jurisdiction, spokeswoman Julie Zawisza says.

The EPA would require congressional authority to set indoor air standards, spokesman Dave Ryan says. However, the agency’s Web site warns of the adverse effects of even a relatively small amount of ozone.

The U.S. Consumer Product Safety Commission is reviewing scientific literature on the effects of ozone-generating air cleaners. It expects to complete its study this fall, spokesman Steve Forde says.
Ionizing Air Cleaners May Pose Health Hazard

Machines Add to Indoor Ozone, Consumer Reports Investigation Shows

By Salynn Boyles
WebMD Medical News Reviewed By Brunilda Nazario, MD
on Monday, April 04, 2005
April 4, 2005 — Some popular ionizing air cleaners could be hazardous to your health, especially if you have asthma or allergies, says a product testing group.

An investigation by Consumers Union (CU) — the products testing group that publishes Consumer Reports — found that five of the best-selling models tested emitted relatively high levels of ozone.

Ozone exposure can aggravate allergies and decrease lung function. It is a harmful gas resulting from car exhaust, gasoline vapors, and other pollutants.

“It is both misleading and irresponsible for an organization like Consumer Reports to suggest that there is any potential harmful effect from a product that tens of thousands of people have purchased and are using every day without adverse consequences,” Sharper Image spokesman and general counsel E. Bob Wallach tells WebMD.

A recent study showed that short-term increases in ozone levels in the outside air contribute to thousands of deaths a year in the United States.

Ongoing Feud

In an October 2003 report, CU researchers concluded that ionizing purifiers do a much poorer job of cleaning the air of dust and smoke than their advertising suggests. The report led to a lawsuit against the consumer group by Sharper Image Corp., which makes the top-selling ionizing air purifiers — the Ionic Breeze line.

The suit was dismissed in November of last year, and Sharper Image has since agreed to pay just over half a million dollars in court costs.

While acknowledging that the new ozone tests did not show that the air cleaners pose a clear health hazard, Consumers Union vice president and spokesman Jeff Asher says they did suggest a potential risk. None of the ionizing air purifiers tested exceeded a generally accepted ozone safety level when the air was measured 3 feet away.

“The bottom line is that these products don’t work anyway, so why would anyone want to expose themselves to a level of ozone which, when added to the ozone that is already in the home, certainly isn’t going to do them any good?” Asher tells WebMD.

Wallach added that the Ionic Breeze model used in the latest test has been shown to comply with federal regulations for safe ozone emissions.

CU’s latest investigation included Sharper Image’s Professional Series Ionic Breeze Quadra S1737 SNX, and four other top-selling brands of ionizing air cleaners: Brookstone’s Pure-Ion V2; Ionic Pro CL-369; IonizAir P4620; and Surround Air XJ-2000.

The findings are published in the May issue of Consumer Reports.

All five of the ionizers failed CR recommendations, with overall failed scores based on the air cleaner’s ability to remove fine dust, smoke, and pollen from a test chamber. They also failed the standard sealed-room testing for ozone levels by producing more than 50 parts per billion (ppb) of ozone detected within 2 inches away from the machine over a 24-hour period.

They all fared better, however, when the tests more closely mimicked conditions in a typical home. In tests measuring ozone levels 3 feet away from the machine in a well-ventilated room, the Brookstone cleaner Pure-Ion V2 emitted the least ozone at 2 ppb and the IonizAir P4620 model emitted the most, at 28 ppb, according to Asher.

“Fifty ppb is the accepted cutoff level for safety, and clearly the worst (ozone emitter) tested generated just over half of that,” he says. “So, one might conclude that there is no danger with these machines. While for most people that is probably true, some people do seem to be particularly susceptible to ozone.”