From the first step into the Sharper Image's headquarters here, where a visitor comes face to knee with a towering 15th-century Spanish suit of armor, it is obvious that this company specializes in eccentricity.
The tin replica (10 1/2 feet tall, $ 950) -- along with such items as the $ 1,600 programmable robot, the quacking telephone disguised as a duck decoy and the talking bathroom scale -- is one of the "desires instead of needs" Sharper Image founder Richard Thalheimer says his company is designed to sell. Catering to these desires has made Thalheimer a multimillionaire since he launched his mail-order catalogue eight years ago at the age of 29.
Now Thalheimer is moving from the mailbox to the mall. In the past year and a half, he has opened one or two Sharper Image retail stores each month, including his first on the East Coast in the National Press Building, two blocks east of the White House. It is a make-it-or-break-it retailing blitz: There will be 27 Sharper Image stores by Christmas, and before Thalheimer is through, he promises to bring a nonfiring Uzi replica, computer software that reveals your sexual self, and a $ 179 radio-controlled submarine to 200 shopping centers around the nation.
If Thalheimer's blitz is successful, it will make him another fortune and add to his reputation as a merchandising whiz kid with an uncanny feel for what makes the upscale male's pulse race. "It's a gamble," says New York-based mail-order consultant Jo-Von Tucker. "But what he's doing is quite smart, he's covering all his bases." And it already seems to be paying off. "His retail stores seem to be doing quite well," Tucker says.
But the Sharper Image's future -- or at least its president's -- may also depend on how much he's changed a management style some say has been as unique as his merchandise. Former employes have called his style erratic and "bizarre." Current employes call it "perfectionist," and say their boss is a new man these days.
There are many former Sharper Image employes. The company has had three controllers and four directors of marketing in the last five years, according to Elyse Eng, personnel director and Thalheimer's wife.
Several years ago, ex-employes even formed a Sharper Image Alumni Association, meeting to talk about new jobs and exchange Richard Thalheimer stories. They sang pep songs about the potential of life after the Sharper Image. They ceremonially burned the catalogue.
"I have very high standards of excellence," Thalheimer says. "People who don't meet those standards don't stay in our company."
"He's the yuppie of all yuppies," says Steve Sugar, a longtime Thalheimer associate who spent five years as Sharper Image's first creative director before leaving to start an advertising agency. "He really identifies with the customer he sells to and that's his great sw,-2 sk,2 ld,10 strength.
"He just doesn't have any people skills ... I don't think he's a very complex person. He reminds me of an idiot savant."
bat10 Even in California, where it's no longer novel for people to become millionaires before they outgrow their acne, Richard Thalheimer's story sounds like a tale a yuppie made up to tell his son at bedtime.
Thalheimer grew up in Little Rock, Ark., where he sold toys in his family's department store during Christmas vacations. "As a young person I always got tired of toys immediately. I grew up thinking, 'I wish I was rich so I could have all the toys I want,' " he says.
Yale University and then the University of California's Hastings College of Law in San Francisco were only the routes to his wish fulfillment. He didn't want to be a lawyer. He didn't even dream of just starting a business. "I always knew I wanted," Thalheimer says simply, "a business empire."
He already had the name for the empire -- "The Sharper Image" -- which he'd coined in 1977, when he was selling copier supplies.
That year, according to those in the business, direct mail was an industry taking off. A man named Joe Sugarman, of JS&A Associates, was creating a legend selling laser mousetraps and negative ion air cleaners in full-page magazine ads that told a story. Thalheimer read the ads and learned.
In 1978, he took out monthly $ 1,000 ads in Runner's World magazine for a wristwatch he thought would appeal to runners -- and made $ 300,000. He used it to start The Sharper Image Catalog, filling it with the kind of adult toys he loved, sophisticated photography on high-quality paper and copy that told a story. And he insisted on fanatic devotion to customer service.
In eight years, Sharper Image has burgeoned from a three-person company with $ 500,000 in sales to a corporation with 486 employes and annual sales of $ 100 million, according to company figures. Thalheimer says Sharper Image mails 2.5 million catalogues a month to clients who are typically male (70 percent), 42 years old and in professional or managerial jobs.
"They have become the cre me de la cre me of that type of catalogue," says Howard Greenberg, a sales representative for vendors who sell by direct mail. For manufacturers, Greenberg says, getting their products into The Sharper Image Catalog "adds a lot of credibility to your company."
"They are one of the most effective companies," says Maxwell Sroge, a direct-mail industry consultant, at marketing "unique marginal luxuries."
Like the 15th-century armor.
"The suit of armor was something that I always wanted growing up," Thalheimer says. He put one in his catalogue because he sensed that other men with large disposable incomes might have the same fantasies. He also put one in his lobby, another in his office and a third in the rear foyer of his home. "The front foyer wasn't big enough," he says.
Thalheimer credits his widely acknowledged genius in picking products to "my intuition."
"Sharper Image has grown steadily because of that," he says. "Why I think my judgment is good is, I am not embarrassed to walk into a store and ask customers what they like. I don't think the president of Avon goes door to door."
Over the years there has been only the occasional dud, such as the attache' case Thalheimer asked a manufacturer to custom design, which sounded a 90-decibel alarm for one hour if moved 7 degrees from a horizontal or vertical position. "It was a great idea, just nobody liked it," Thalheimer says.
But these days, Thalheimer's intuition is not enough. In 1986, Sharper Image sales barely grew. Lured by successes like Thalheimer's, other would-be instant millionaires jumped into the mail-order business until America's mailboxes -- and then its wastebaskets -- were stuffed. (In 1979, 4.3 billion catalogues were distributed nationally, according to the Direct Mail Association. By 1985 the figure was 10 billion.)
He decided to open retail stores, Thalheimer says, because the mail-order business is "stagnant." And because "it's the nature of an entrepreneur to go as quickly as is feasible and especially to press your advantage."
Thalheimer looks up from the yellow pad where he is writing himself a note about the telephone call he's just completed, then looks down at a sheet of figures he's studying while talking. He looks up only at calculated intervals to make eye contact, like a good salesman.
He looks up to make the point that he is not a workaholic. He competes in triathalons. "Here's my subscription to Triathalete," he says, picking up a magazine from his desk top. He flies a single-engine plane. "Here's my copy of Professional Pilot."
Thalheimer doesn't personally own all the items featured in his catalogue, but he does own eight of the phones, most of the exercise equipment, most of the knives and lamps, the oak file cabinets, all of the sunglasses, the electronic light sculpture, the space age pogo stick, the $ 99 toothbrush, the sound generator (choice of waterfall or surf sounds) and the remote-control helicopter (six-foot wingspan, $ 1,500). Recently, he got the video telephone, which enables him to see anyone else in the country who calls who also happens to have one.
bat10 In the "Thinking Big" seminars Thalheimer organized in 1984, anyone willing to pay $ 300 could hear his management philosophy, including Rule No. 3: Demand excellence from your employes, your contractors and your suppliers -- and cut them loose if they don't produce.
"I have a very ambitious program going, and there is no room in it to support excess or nonproductive people," he told Success Magazine.
In those days he liked to talk about personnel policy by pointing out (this time to the San Francisco Examiner) that "a tree, whether fast-growing or even mature, still has to be pruned regularly to stay healthy." (He was also quoted in the Examiner as saying he terminated three times the number of staff who quit, many in less than six months -- a figure he says he never used.)
The pressure on employes was so intense that some of them took to calling the gray, futuristic Sharper Image headquarters "the Death Star" and Thalheimer, "Lord Vadar." No one really denies the pressure, though Shaper Image workers differ in seeing it as productive or destructive.
"Richard would walk past and people's skin would start crawling. You just never knew what he'd do," says a former high-level employe who spent three years at Sharper Image, leaving a year ago on amicable terms that he says he doesn't want to jeopardize by being quoted by name. "If Richard walked into the art department and saw a bunch of half-empty coffee cups, he'd blow his stack." People put up with him, the former employe says, because "the amount you can learn in the time you do is pretty remarkable."
Marcia DeHart found the pressure so destructive that she quit and attended meetings of the now-defunct Sharper Image Alumni Association, which she says attracted about 60 former employes before people began to lose interest as they moved on to other jobs.
"You just never knew when you'd get these bizarre calls," DeHart recalls of her job as supervising copywriter five years ago. "One time Richard called me ... and said, 'You can tell me why I shouldn't cut your salary by $ 3,000'?"
DeHart, now a free-lance copywriter, says she suspects her real fault in Thalheimer's eyes was that he once saw her smoking in a restaurant at lunch.
According to past and present employes, no smoking is allowed on the Sharper Image premises. No eating at work stations. No personal items pasted or tacked on the walls or even on the bulletin boards. Coffee cups must be no more than half-filled so that the coffee will not spill on the carpet. Thalheimer is known for walking into an office and starting a conversation by noting that, at the Sharper Image, blinds must be either all the way up or all the way down.
Thalheimer's public dressing-down of employes for offenses against the Sharper Image image, DeHart says, created an atmosphere of constant tension, so that even before he had a chance to fire them, people would quit. "I gather that more recently things have stabilized," she hastens to add, "which is good for everybody."
Bob sw,-3 sk,3 Baker, Sharper Image telecommunications director in 1981 and 1982, says the tension caused by the company frequently "firing people without notice" meant that "people would walk around the company wondering whether they had a job or not."
"There sw,-2 sk,2 is no problem here," says Thalheimer, who declines to respond in detail to his former employes' recollections of events. "Perhaps I wasn't as polite four years ago as I am now." His critics, Thalheimer says, "either have a very immature attitude toward the working environment or negative feelings" because of the circumstances under which they left the Sharper Image.
Two years ago, Thalheimer hired Ernie Garay to create the strategy for launching the retail arm of Sharper Image. Garay, who brought 20 years of retailing experience at such places as the Gap with him, left after 12 weeks when he decided, he says now, that Thalheimer was "too bizarre" to work with, "abusive" and "condescending."
Of those 12 weeks, Garay recalls Thalheimer storming into more than one meeting to chew him out and being called to Thalheimer's office to receive a lecture on how the McDonald's hamburger empire had been built.
"One Friday I'd come in and have him tell me 'you are doing an outstanding job and we're very happy with you.' The next Monday he'd come in and tell me something different. I got the feeling any minute I was going to be terminated," says Garay, now vice president of Platt Music Co. He quit.
"I think anybody who left the company after a short period of time would be unhappy," Thalheimer responds. People like that, he says, "either have a very immature attitude toward the working environment or negative feelings" because of the circumstances of their departures from the Sharper Image.
Garay estimates "the turnover there had to exceed 35 to 40 percent at the middle-management level." Jennifer Wilkinson, who has been the Sharper Image's marketing manager for three years, estimates managerial-level turnover at 50 percent around the same time, though she says she would prefer the figure come from the personnel office (which says no one has kept track). Neither Thalheimer nor his wife would estimate the company's current or past turnover rate.
Thalheimer recently settled out of court a lawsuit filed by Roberta Fortune, his former marketing director, who charged among other things that he had falsely promised her a bonus, a stock option and to make her company president -- promises, she said in the suit, she discovered he had also made to other managers. Thalheimer calls the charges a "fabrication," but neither side will discuss the terms of the settlement.
"My sk,3 weakness is I have very little patience and I always want to have something done or changed immediately," says Thalheimer. "We are a company that's learned to turn on a dime. It makes people think it's a more difficult place to work than others. I see that as a strength, not a weakness."
bat10 Ask him his personnel philosophy these days, and Thalheimer says, "First and foremost I believe in letting people do their job and leaving them alone. This is one of the most loosely supervised companies."
He sk,2 has reasons to pay attention to his management techniques. So far the new retail stores appear to be doing well (contributing 50 percent of Sharper Image sales this year, according to Thalheimer, who says the D.C. store is one of his most successful) -- but with his company getting larger and more bureaucratic, Thalheimer knows he must delegate responsibilities.
What's more, he says he wants to take the Sharper Image public. And when he does, investors are going to look at whether he has put together a stable group of managers who work well together. "If a catalogue company is considering going public they must take a hard look at their entrepreneurial spirit and see if it's acceptable to investors," says consultant Jo-Von Tucker. "The revolving door is not acceptable. Richard has had reason to evaluate his egocentric performance. If he has, you have to give him credit."
Those who have worked for him agree that Thalheimer is a charm school graduate these days compared to the man who ran the Sharper Image in its turbulent early days. They just differ about when the transformation took place.
"He's less frank than he used to be," says his wife. "That's some of what people used to complain about." Eng says the company has been issuing written warnings rather than summary firings since 1983.
"Two to three years ago there were a lot of people moving through," says Robert Bissell, who replaced Sugar as creative director. "Every day it was upheaval." The problem, Bissell says, was simply Thalheimer's perfectionism -- but "about two years ago, Richard really realized we'd have to stabilize and consolidate somewhat."
It sk,3 was about a year ago, says Jennifer Wilkinson, who has been Sharper Image marketing manager for three years, that Thalheimer "let go a lot" and the company began to "become much more organized," with a formal structure. Of her boss she says, "I like him ... I think he's very smart. Yes, the turnover was high. In the last year it's really declined at the management level.
"If sk,2 we're going to grow and go public ... he's had to adjust his people skills."
It's been a while, Wilkinson says, since Thalheimer sent her a note to please put regulation black frames around the personal photographs in her office.
"I think [the company] is almost like his home," she says. Thalheimer's home, his wife says, is immaculate.
bat10 "We sw,-3 sk,3 have to budget our time so we end in exactly an hour," Thalheimer says, looking first at his $ 4,000 Corum Gold Coin watch, then at the buyers seated around the table at the product meeting.
However sw,-2 sk,2 one judges his management style, Thalheimer's intuition is still looking golden.
Examining a handful of designer brass fire extinguishers shaped like Christmas tree ornaments, he makes a face. "Is anybody interested in this?" Not even the buyer who brought them in defends them. Thalheimer dismisses them as "too expensive. And fire extinguishers are a dull category."
He is more intrigued with the reading glasses with racy frames, a $ 149 version of the magnifying lenses people buy at the dime store for $ 15. "The copy pitch is: Man, who has evolved over millions of years, was not made to look 18 inches from his face all the time." Thalheimer is playing teacher now, instructing his marketing people to look for the story that will sell the product. "The pitch has a lot of anthropological grounding."
"Make this real brief, Ramon, 'cause I hate this product," is all Thalheimer spares for a bicycle that pedals straight up and down instead of in a circular motion.
But he is so excited by the potential of the trench coat with built-in bulletproof vest that he tries it on and makes two other men at the meeting try it on as well. This is Thalheimer at his most playful, charming and intuitive.
The marketing manager has put on the "dubious products" list for November or December a foot-long Cadillac coupe carved out of crystal. It's expensive, $ 995, and it's a composite of various models.
Thalheimer is not a bit dubious. He doesn't expect to sell many, he admits. He is still instructing his team on what this business is all about.
"I just want to have one in each store," he says. "When you see the car on a pedestal in the middle of the jewelry section it looks super.
"It's very ..." He pauses until the proper description comes to him, then smiles when it does: