Sharper Image Files for Bankruptcy

San Francisco Sharper Image Corp. has filed for Chapter 11 bankruptcy protection, saying declining sales and three straight years of losses led to a shortage of liquidity.

The company filed for protection late Tuesday with the U.S. bankruptcy court in Wilmington, Del. Sharper Image said it had $251.5 million of assets and $199 million of debts as of Jan. 31, according to the filing. Cash on hand totaled about $700,000, the filing shows.

"Sharper Image is in a severe liquidity crisis," CFO Rebecca Roedell said in a separate filing. 

She said the company has suffered from increased competition, narrowing margins, litigation, lower consumer and market confidence, tighter credit from suppliers, and poorly performing stores.

Sharper Image is seeking a $60 million loan arranged by Wells Fargo Retail Finance LLC to keep operating, court papers said.