Sharper Image Looks to Brighten Up

In a quarterly filing with the Securities and Exchange Commission, Sharper Image signaled that sales for the air purifier product line aren't expected to improve anytime soon.

"Beginning in 2005, sales of this line of products have declined significantly, which has adversely affected our sales and net income," the filing said. "We expect the sales of this line of products to decline in the foreseeable future, which may adversely affect our future profitability."

Wilson points to the Father's Day shopping period as a key time for Sharper Image. If the company gains some traction, he expects the stock to go up rather quickly. But if the company doesn't pick up some momentum at Father's Day, it is liable to find itself orphaned by shareholders.

"While Mr. Lightman commands creditability in the direct-to-customer business, neither Crosstown Traders nor Fingerhut had the problems of being dependent on one product or jumpstarting sales on a product that no longer commands differentiation in the industry," Wilson wrote.

"Sharper Image's strength is in product differentiation, and the company may be set for a turnaround if Mr. Lightman finds the right connection with Sharper Image's core customer," he continued. "However, we have yet to be convinced, and would advise investors to remain cautious with [the company's] shares if they rise about $11 to $12 as this upward movement may be short-lived."

Shares of Sharper Image recently were down 3 cents to $10.37.