Richard Thalheimer, Founder of Sharper Image, Talks for the First Time About His Ouster

Throughout Richard Thalheimer's sprawling Pacific Heights home are quirky artifacts from happier days when he still ran The Sharper Image.

There's Alfred the Butler, once a popular catalog item, holding a silver tray filled with chocolate mints in the foyer. A whimsical, life-size C-3PO, the Star Wars character, which the company once sold for the sci-fi buff who has everything, adorns a corner of the living room. Elsewhere, there's a full suit of armor, another refugee from past Sharper Image catalogs at $3,800 a pop.

The 59-year-old Thalheimer made a name for himself — not to mention a fortune — purveying such fun-but-inessential luxury items to the wealthy and hordes of the upwardly mobile in shopping malls across America. Within the last year, however, the man whose public identity had been intertwined with the company from its start has vanished from the Sharper Image consciousness.

Dumped as head of the San Francisco–based retailer last September, and banished from its board at year's end, Thalheimer's remaining connection to the company he founded 30 years ago was severed in May. That's when the new regime installed after a shareholder revolt — headed by corporate turnaround artist Jerry Levin — forked over $26 million to acquire his remaining 20 percent stake in the company.

After the takeover, products with Thalheimer's likeness on the packaging were sent back to distribution centers to be reboxed; all mention of him as the company's founder was removed from the catalog and other materials; and an inspirational CD, Creating Your Own Sharper Image: Richard Thalheimer Helps You Grow and Manage Your Business and Your Life, was yanked from stores.

Thalheimer's exit had been hastened by consecutive years of declining sales, a depressed stock price, and mounting legal woes from consumer class-action lawsuits challenging the safety of the Ionic Breeze air purifier, the company's most successful product. (The class-action cases were preceded by a famously unsuccessful legal complaint the company lodged against Consumer Reports magazine, which, ironically, helped draw attention to the air purifier's alleged failings.)

Earlier this month, a federal judge in Florida rejected a settlement the company had been hoping for in one of the lawsuits, ruling that awarding $19 store coupons to people who bought the air purifier before it was equipped with an ozone-reducing attachment was not "fair, adequate, and reasonable." Experts say that the other consumer action, initiated in San Francisco, and which had been on hold pending the Florida ruling, has the potential to push the company — with its 186 stores and swank headquarters on the Embarcadero — into bankruptcy.

Sitting in his living room with its sweeping views of the bay and the Presidio, Thalheimer talks about his last days as chairman and CEO the way a historian might describe a palace coup. It's the first time he's agreed to be interviewed since being ousted.

"All in all, I guess it wasn't so bad," he says, as if trying to convince himself that his forced departure from his beloved company somehow might not have happened. Thalheimer professes to have accepted his overthrow "with a great deal of philosophical calmness," but acknowledges the difficulty of being tossed from an enterprise he built from scratch. "You'd think the founder-creator guy would be recognized more graciously," he opines. "Even if you don't want to follow him anymore, even if you think he's done, you still sort of recognize the founding father."

First as a blockbuster mail-order catalog, then as an iconic chain of retail outlets ensconced in shopping malls, The Sharper Image came to epitomize the technologically innovative, the new and the cool. And the man who epitomized The Sharper Image was Thalheimer, whose low-key effervescence and congenital optimism made him an alluring figure as its chief executive and pitchman.

"Richard was The Sharper Image," says Craig Trabeaux, who rose from being a store manager to being head of all its stores before following his boss out the door. "In every sense of the word, the company was an extension of his persona."

Back in the early '70s, when Thalheimer began selling copier supplies door-to-door to merchants in the Financial District, there was little about his fledgling enterprise to suggest it was the forerunner of a new retailing genre. He called his one-man operation Thalheimer Business Systems, before scrapping the name for one that seemed better suited to what he had to offer: The Sharper Image.

The gig started the day after he arrived in San Francisco in a new fire-red Porsche bought with profits from selling encyclopedias the previous summer. At the time, he was fresh from having acquired a degree in psychology at Yale, and was preparing to enter Hastings College of Law.