Sharper Image Settles Air Purifier Suit

(AP)  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.

The merchandise credits can be applied toward the purchase of other Sharper Image-branded products for a year after they are issued.

The same group of consumers also will be able to buy a grill attachment designed for the Ionic Breeze for $7. Although Sharper Image did not quantify how much customers could save under this offer, several types of them were listed Friday for $39.95 on the company's Web site.

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.

Sharper Image denied the allegations, citing scientific studies validating the Ionic Breeze's effectiveness. Nevertheless, management "has concluded that it is in the best interest of Sharper Image, its shareholders, and its customers to settle this class action," according to court papers.

The settlement still requires court approval. Friday's filing indicated a hearing on the settlement will be held by March 1.

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.

[james_cannon]

great articles on this air purifier lawsuit. I your readers desire they can read some <a href="http://www.reviewairpurifier.com/">air purifier reviews</a>

[Nate Feliciano]

Sharper Image defrauded all the Ionic Breeze consumers. I have 2 Ionic Breeze and I want a full refund. Not a $19 Dollar Voucher. I want my money back $800. I work hard for my money.
What happen to the SATISFACTION GUARANTEED?
At COSTCO you can return anything with no questions ask. That is the way to do business.

[rolko]

Be fair to "xfredmenzies", he probably intended to say that he was 67 (indicating his age). Maybe he caught up in the heat of the argument.

[suiteo1]

TO xfredmenzies,

I find it hard to believe you have 67 units in just one room but, IF you do and since you didn't mention where you really do work, I would like you to tell me what kind of job you have that lets you afford these in the first place! Since there are various sizes of Ionic Breeze models available there are also various prices, but even if you were to take a low overall average price of say: $200.00 per unit, times 67, you get a whopping price tag of $13,400.00 and that%u2019s NOT including tax!

If your job gives you that kind of money to "blow", I want in!

[flolake]

The end of The Sharper Image's brand is near. I hope.

[tmkgls]

I agree with esqimo. The consumer got nothing - a $19 voucher for the Sharper Image store ONLY and then they can spend another $7 for an attachmnet whereas the lawyers get an enormous sum of $1.87 million! I think it's the lawyers who ripped off the consumers more than Sharper Image!

[olebd]

You must have a BIG living room to have 67 of them in there!

[xfredmenzies]

I do not work for Sharper Image, but I want to tell everyone that I think the Ionic Breeze is a fantastic appliance! I have 67 in my living room and the air is always crisp and clean.

[samthetvcat]

What goes around comes around though - now some baby seat organization has accused Consumer Reports of fudging their test figures to sensationalize their claims that certain baby seats were ineffectual . . . and Consumer Reports retracted their claims which are now under review.

I'm just so sick of all the corporate wrongdoing and the coverups - half the time it's a tossup over which ends up being worse! :o

[bgddy58]

Most folks don't seem to understand the point of the lawsuit. No one claimed that the Ionic Breeze and it's variants would not clean the air.

The claim was for misleading advertising: the Ionic Breeze was/is deemed ineffective for average rooms because they have no way to move air through the unit. If your room has excellent air circulation, they apperently work OK. If your room has average or below-average air circulation, they are less effective than units that have a fan.

The problem is that Thalheimer and the marketing gurus at SI dug in their heels after the disasterous original Consumer Reports article. Rather than revise their marketing claims they continued to make claims that were simply not true and achievable for many users.

Plus, the units were shown to generate mucho ozone after several studies were published demonstrating a direct correlation between exposure to ozone and lung cancer. More bad marketing decisions.

These guys should have fired smarmy Thalheimer after the first Consumer Reports flap and saved themselves $61.87M.