The Sharper Image and MerchSource Expand Licensing Agreement

SAN FRANCISCO--()--Sharper Image Corporation (Pink Sheets:SHARPQ) today announced that it has signed a new, expanded multiyear licensing agreement with MerchSource, LLC, (MerchSource) a leading manufacturer of unique electronic gifts and other items.

Under this new licensing agreement, MerchSource will offer an expanded assortment of Sharper Image branded electronic gift items, which currently includes items such as digital photo keychains and MP3 players. The new product offerings will also include a broader assortment of digital photo viewers, a wider array of radio-controlled replica toys, and new categories of massage and other wellness items, as well as several soft goods gift categories, including memory foam slippers and plush home décor items. These products will be designed specifically to meet the quality, excitement and innovation attributes that are associated with The Sharper Image brand. The first products will be available in the fall of 2008, many of them premiering at The Sharper Image stores, catalog and website.

John W. Spotts, Senior Vice-President, Brand Licensing for Sharper Image, said, MerchSource is off to a very good start and is a valued partner in the Sharper Image licensing program. The new categories now under license are a close fit for the brand and MerchSource is an ideal partner to execute them.

Mike Roberts, Partner and Co-Founder of MerchSource, said, We have had tremendous success with The Sharper Image license since signing our first agreement, and our retailers value the brand and want to see more quality products under The Sharper Image name. We look forward to the success of these new categories that are closely aligned with The Sharper Image brand equity.

About Sharper Image

The Sharper Image is a specialty retailer that is nationally and internationally renowned as a leading source of new, innovative, high-quality products that make life better and more enjoyable. The Companys principal selling channels include 185 Sharper Image specialty stores throughout the United States; the award-winning Sharper Image monthly catalog; and its primary Web site, www.sharperimage.com. The Company also has business-to-business sales teams for marketing its exclusive and proprietary products for corporate incentive and reward programs and wholesale to selected U.S. and international retailers.

About MerchSource

Established in 2000, MerchSource, LLC specializes in the design, development, and production of key consumer product lines and has become one of the largest vendors of high-quality, cross category merchandise in the country. With more than 25 years of experience in sourcing, manufacturing and shipping among MerchSource's executive team, the company provides unmatched service for national retailers. MerchSource has offices in Hong Kong, Shanghai and Guangzhou, and currently imports more than one million units of merchandise on a monthly basis to its five distribution facilities located in California, Texas, Georgia, Illinois and New Jersey.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the Company's current plans, expectations, estimates, and projections about the specialty retail industry and management's beliefs about the Company's future performance. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties that are difficult to predict and which may cause the Company's actual results and performance to differ materially from those expressed or forecasted in any such forward-looking statements. Some of these risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for the year ended January 31, 2007 under "Risk Factors". These risks include, among other factors, the success of its new business strategy, its ability to continue to find or develop and to offer attractive merchandise to customers, the market potential for products in design, the success of its advertising efforts, changes in business and economic conditions, risks associated with its retail store, catalog and Internet operations, and changes in the competitive environment in which it operates. Other risks that the Company faces include, but are not limited to, the following: (i) the ability of the Company to continue as a going concern; (ii) the Company's ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; (iii) the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 case; (iv) risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the case to a Chapter 7 case; (v) the ability of the Company to obtain and maintain normal terms with vendors and service providers; (vi) the Company's ability to maintain contracts and leases that are critical to its operations; and (vii) the potential adverse impact of the Chapter 11 case on the Company's liquidity or results of operations. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements. However, readers should carefully review the statements set forth in the reports, which the Company files from time to time with the Securities and Exchange Commission, particularly its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K.

Contacts

Sharper Image
Tersh Barber, 415-445-6274
or
MerchSource
Mike Roberts, 949-900-0904

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Contacts

Sharper Image
Tersh Barber, 415-445-6274
or
MerchSource
Mike Roberts, 949-900-0904