Shares of multichannel specialty retailer Sharper Image Corp. rose substantially in March, due largely to strong sales momentum for the company's new Ionic Breeze GP Silent Air Purifier.
According to Bloomberg, Sharper Image's shares gained 26.9 percent in March, placing the company among the strongest performers on the DM News 100 portfolio for the month. In fact, the entire portfolio gained 9.49 percent for the month.
Sharper Image's shares opened March on an up note, and hardly looked back all month. After closing at $14.55 on March 1, the company's shares gained 48 cents to close at $15.03 on March 4. After announcing strong sales for February on March 7, the company's shares closed at $14.72. The next day its shares gained 30 cents to close at $15.02. The biggest increase came in mid-March. On March 11, Sharper Image's shares closed at $14.51. They ended the next day up 89 cents at $15.40.
Sharper Image said total company sales for February rose 35 percent to $26.9 million, from $19.9 million a year earlier. Total store sales rose 16 percent to $14.6 million, from $12.6 million a year earlier and comparable store sales rose 5 percent in the period. Sharper Image catalog sales rose 98 percent in February to $8.7 million, from $4.4 million the previous year. Internet sales climbed 23 percent to $3.6 million, from $2.9 million.
“The sales improvement we saw in January strengthened in February and has continued into early March,” said Richard Thalheimer, Sharper Image's chairman/CEO. “The customer response to our television infomercials continued to be outstanding, contributing more than half of the catalog sales increase in February.”
He also said that strong customer demand for the company's new Ionic Breeze GP Silent Air Purifier, which was featured on the cover of Sharper Image's March catalog, helped fuel the sales growth. The company supported the product, which was introduced in February, with direct mail, radio and print advertising.
“We remain committed to our long-term strategy of growth through multiple sales channels, including stores, catalog, Internet and direct response television,” Thalheimer said. “We're continuing to build on our strong brand name with increased sales of private label and Sharper Image Design proprietary products.”
Infomercials accounted for about 32 percent of Sharper Image's total advertising budget last year, analysts said.
Thomas Filandro, an analyst with J.P. Morgan Securities Inc., said he was encouraged by the strong sales of the Ionic Breeze and expects the company to support it with more infomercials.
“We would expect continued focus in the area of infomercials, which we view as a solid platform for educating consumers on the functionality of the company's Ionic products,” he said. “We are extremely encouraged by the strong sell-through of the newly introduced Ionic Breeze GP.”
One of the driving forces behind Sharper Image's success, Filandro said, was the customer demand for its private label and proprietary products. Last year 70 percent of total sales came from these products. He noted that 60 percent of that came from proprietary products and 40 percent from private label products.
“Infomercials continue to broaden the Sharper Image brand recognition and sell product,” Filandro said.
