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STORE CHAIN REFLECTING CUSTOMERS' NEW LIFESTYLES SHARPER IMAGE SELLING SHARPER ITEMS

THE ODD THING about this recession, says Richard Thalheimer, president and founder of an upscale electronics retail and catalog company, is that it hit higher income levels first.

"The recession hit our typical customers first," Thalheimer said. Therefore, the Sharper Image, the San Francisco-based company that sells items that have been called yuppie toys priced between $15 to $5,500, will undergo some changes.

The Sharper Image will be focusing on "gadgets with a purpose" -- reasonably priced, utilitarian items that are environmentally sound and socially redemptive.

In short, Sharper Image products will be more in step with the attitudes and lifestyles of the 1990s. The company will be pushing items such as their toothbrush purifier and the air ionizer, both of which remove impurities. It also will place more emphasis on selling rugs that support health care for impoverished children in the far east and high-tech key chains made by handicapped workers.

Still, Sharper Image will continue with such products as a motorized tie organizer and radio-controlled scale model sports cars.

This step into social commercialism is as much a response to sluggish retail sales, especially for high-end items and durable goods, as it is a recognition of concern for the environment and the plight of the less fortunate.

Items falling into the $50 to $85 price range are selling well this year, said Jerome J. Jacobi, manager of the Sharper Image store which opened in the Walden Galleria mall in Cheektowaga in mid-November. Last year, the company's average gift price was between $200 and $250, he said.

Sharper Image, which boasts sales in the $200 million annual range, has seen its business slow down this year. Revenues for the six months ended in July dropped to $75.8 million from $79 million during the same period last year, with a net loss of about $3 million.

"Generally, we lose money in the first six months," said Thalheimer, who paid a visit to the local store late last week. "All our profits are made during the fourth quarter."

Now is the time to "rethink our strategy," Thalheimer said.

Recycling is becoming an issue at the Sharper Image, he said. The store is researching rechargeable batteries to cut down on batteries ending up in landfills. A solar-powered watch will send no batteries to landfills, he said. The Sharper Image next year will phase out products packaged in Styrofoam and will replace plastic bags with recyclable paper bags.

Sharper Image will be informing customers about the special origins of products, such as a key organizer or an Oriental-style rug. The high-tech key organizer is manufactured and assembled by mentally retarded workers in Ohio, Thalheimer said. Sales of the rugs support the only free children's hospital in Bangladesh, he added.

Thalheimer calls this marriage of commerce and social responsibility the next logical step for his generation. At 41, Thalheimer counts himself among the baby boomers who were social activists during the 1960s, movers, shakers and deal makers of the 1980s and, now that the tide of high earnings has shifted, cautious and concerned consumers of the 1990s.

"Sharper Image is a reflection of their lifestyle," he said. The 1990s "is a time when I can combine by personal beliefs with making a business successful."

Thalheimer marched on Washington in a 1969 demonstration against the Vietnam War before graduating from Yale University in 1971. He received a law degree in 1974.

After practicing law for a short while, he starting selling digital running watches through ads in a Runner's World Magazine. He parlayed the profits into a catalog company called the Sharper Image in 1978 with 40 different products.

By 1982, Sharper Image was on the map with more than $50 million in catalog sales. By 1984, Thalheimer had augmented the catalog business with four retail stores.

Today, Sharper Image has about 75 stores and mails about 25 million catalogs a year, he said.

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