It is 1 p.m. Tuesday – typically a slow time in the retailer’s week. Richard Thalheimer eyes the crowd edging closer to the glass counter in The Sharper Image store at the South Street Seaport. Filling the aisles are a mix of yuppified Wall Streeters and out-of-towners drawn by the chance to pick up a fancy, high-tech Christmas gift at a bargain-basement price.
Thalheimer asks the store manager if he can run the auction. The manager nods. After all, Thalheimer is president of the company.
Though he has just learned by phone that he will have to “eat” more than $250,000 worth of leather jackets, Thalheimer is smiling. The regularly scheduled Sharper Image auction has pulled much larger crowds than any of the other neighboring shops – equally trendy Banana Republic is directly opposite – in the arcade.
And in another three days, Thalheimer will head off on his fourth vacation this year. “I’m not going to burn myself out and jeopardize my company or my health,” says the founder and chief executive officer of The Sharper Image Catalog and 25 Sharper Image stores nationwide. Not even the news of the loss on the jackets can dampen his enjoyment.
They were reordering when a recent catalog offering sold out, Thalheimer explains. “We tried another manufacturer, but when the coats arrived, they were inferior to the ones we sold out on. We won’t stick our customers with them.
“Sometimes a little kick in the pants hurts, but I’m not going to dwell on the loss.”
Of course, Thalheimer can afford that attitude. In the last eight years, he has parlayed a $200 profit from a single classified ad for runners’ watches into an operation industry experts say does more than $100 million a year selling glitzy electronic novelties, jewelry, exercise equipment, and high-priced chachkies.
Thalheimer, who says he never stops seeking challenges, got his start nine years ago, distributing a high-quality copy of a $200 runners’ watch for only $29 through an ad in a runner’s magazine. “I took my $200 profit and launched the catalog”, he says.
The first edition of The Sharper Image Catalog came out in 1979 and listed 25 products. There are almost 200 items in the 1986 Christmas edition, and an average customer spends more than $100 per sale.
“I’ve never looked back,” says the 39-year-old millionaire, who does admit to facing some obstacles on the road to building the upscale catalog and retail store empire.
A special book of telephones bombed because we sent out too many catalogs,” Thalheimer recalls. “We also flopped with a catalog strictly for women.”
Industry experts also point out Thalheimer was one of the first with home TV shopping but bailed out when he couldn’t turn a large enough profit.
To critics who say he overcharges on so-called staple items such as TVs, VCRs, and radios, Thalheimer responds: “We charge a uniform price from New York to Hawaii,” he says. “What isn’t always competitive in New York City is still a terrific price in Alaska.”
He also stresses that at least half his customers neglect to take advantage of The Sharper Image’s “match-any-publicized-price guarantee.”
“We mail out that price-guarantee form with any mail order, too,” he says.
The guarantee is also good at the retail stores. “It’s not a gamble to purchase something from us.”
His biggest gamble so far has been the retail store operation. Observers say Thalheimer spent upward of $500,000 apiece to open 25 stores, dropping earnings for the last two years.
Thalheimer, an accomplished jet pilot, hopes he can equal the heights of another hot retailer, Leslie Wexner of The Limited. “What he’s done with women’s clothes, we’re eventually going to do for men and families,” he says with confidence.
Thalheimer, who hopes to go public with his company next spring, has not ruled out other ventures.
“We are going to stay on top of the catalog and retail business through some innovations I’m not yet at liberty to divulge,” he says.
Industry experts expect him to bring out other trendy catalogs.
They also expect more store innovations, such as The Sharper Image 1 p.m. Tuesday auctions that have been filling the South Street store.
A graduate of Yale University and Hastings Law School, Thalheimer also has been known to eschew a product for lack of price, color or style. “It’s true our customers go for value, but sometimes they’d rather go an extra $50 for more bells and whistles.”
Roberta Maneker, vice president of the Direct Marketing Association, explains the upward push of Thalheimer.
“He’s got such a unique approach to marketing the bizarre products,” she says, “that his catalogs take on a life of their own. He’s trying to mimic that appeal in his stores, too.”
Thalheimer points to a silver and black treadmill that is attracting a throng of onlookers at the back of the store.
“We could have purchased that in plain black and it would have been functional,” he says, “but function without style doesn’t work for me or my customers.”
Still, just moments after concluding the interview, he turns around and brings down the gavel on products such as a $200 espresso machine, a $300 VCR and a high-tech teddy bear all at prices well below cost.