Sharper Image gift cards' value gutted by bankruptcy

By MARK ALBRIGHT, Times Staff Writer
Published March 12, 2008

Here's another cautionary tale about gift cards: Sharper Image Corp. stopped honoring its own gift cards Feb. 19, the day the electronics chain filed for Chapter 11 bankruptcy.

That stuck Sharper Image customers with $43-million in outstanding gift cards, so we're not talking a few Ionic Breeze air purifiers here.

It's all because accountants treat gift cards as loans until they are redeemed. So once a retailer files for protection from creditors, people holding gift cards get in the back of the line at bankruptcy court with unsecured creditors waiting for the unlikely event of a payoff.

While some wags wondered where bored husbands will kill time playing with gadgets without a Sharper Image around when their wives take them shopping, Brookstone smelled opportunity in its rival's pain.

Brookstone is honoring any Sharper Image gift card by promoting a 25 percent discount on most merchandise. That may not sound like much, but can add up on one of those $4,500 massage chairs.

Sharper Image realized that perhaps its tight-fistedness wasn't the best way for a retailer hoping to remain in business to treat customers. So it persuaded a Delaware bankruptcy judge to allow it to honor its own gift cards -sort of. You can only cash them in on a single transaction. And then you must buy at least twice the face amount on the card.

The San Francisco merchant, which lost much of its zing as a yuppie toy store some time ago, plans to close 96 of its 184 stores and sell the leftover inventory to liquidators to ditch at store-closing sales.

The Sharper Image in Westfield Citrus Park is one of five in Florida that made the store-closing list pending in bankruptcy court. The one at International Plaza in Tampa did not and will stay open.

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Westfield Brandon Town Center has filled most of the holes left by its new wing that opened a year ago. Five retailers - some new to the Tampa Bay market - have signed up to open this spring, and a signature Mexican restaurant will bring an El Torito Grille from California this summer decked out with a different name.

Cinigual (Spanish for "without parallel") Contemporary Mexican Cuisine is the latest from RealMex Restaurants, a Cypress, Calif., chain that also owns eight brands including Chevy's Fresh Mex, Casa Gallardo and El Torito Grille. Crews are working on the slick $800,000 interior build-out across the walkway from the Cheesecake Factory.Entrees will run from $11.99 for a cheesy enchilada stack to a $21.99 halibut in spicy tomatillo sauce.

New stores to the region are Marc Ecko Unlimited, the hip-hop apparel brand, which will open one of its Cut & Sew stores, and American Eagle Outfitters, which will open Aerie, a chain that specializes in intimate apparel, cotton dorm wear and pajamas for 15- to 25-year-old women.

Others chains opening their second stores in the Tampa Bay market are Apple Store, DSW/Designer Shoe Warehouse and Coach leather.