January 22, 2007

Sharper Image Air "Cleaners" -- lawyers getting into the act.

I had written back in 2004 and 2005 about how Consumer Reports gave a very negative review to the (supposed) high-end Ionic Breeze air cleaner from Sharper Image and how it failed some very basic tests for cleaning. Posts here, here and here. Consumer Reports ran the test several times including one with an "improved" unit and it failed every time. Sharper Image did not like this so they sued Consumer Reports. Consumer Reports won the lawsuit with Sharper Image having to pay about $400,000 in C.R.'s legal fees. Well, it seems that the general public is weighing in as well too. From CBS News/AP:
Sharper Image Settles Air Purifier Suit
High-Tech Store Will Discount For Allegedly Misleading Air Purifier Claims

Sharper Image Corp. has agreed to discount its high-tech gadgets by more than $60 million and make several other concessions to settle a class-action lawsuit alleging the specialty retailer misled customers about the effectiveness of its air purifiers.

Questions about the purifiers helped lead to a sales slide and the arrival of a new management team that is now trying to salvage the 194-store chain.

Because the vouchers require a purchase, the settlement could actually help Sharper Image spur more sales — an elusive goal during the last two years.

Under the proposed settlement disclosed Friday in a regulatory filing, Sharper Image will offer $19 merchandise credits to each of the roughly 3.2 million consumers who have bought one of its "Ionic Breeze" purifiers since May 6, 1999.

The ultimate cost of the settlement will hinge on how many of the eligible customers redeem the merchandise vouchers, Sharper Image said in Securities and Exchange Commission documents.
And a bit more:
Besides the discounts, Sharper Image agreed to tone down its advertising claims about the power of the Ionic Breeze and pay up to $1.87 million in fees to the lawyers who filed the suit on behalf of Manual Figueroa.

Figueroa said he paid several hundred dollars for an Ionic Breeze to help remove dust, pollen and other nettlesome particles from the air, only to discover the device did not work as advertised.
And one last excerpt:
After suffering its first loss in 15 years in 2005, Sharper Image's troubles deepened in 2006 as its sales plummeted by 21 percent during the first 11 months of the fiscal year.

The slide resulted in the September ouster of Richard Thalheimer, Sharper Image's founder and longtime chief executive. A new management team is led by turnaround specialist Jerry Levin.

Sharper Image's slide began when sales of its once-popular Ionic Breeze started to crumble after Consumer Reports derided the products as ineffective.
And if they had owned up to the Ionic Breeze not doing its job, they could have weathered the bad review and come out ahead. Instead, they ramped up the advertising and nearly sunk the company. Posted by DaveH at January 22, 2007 8:42 PM
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