Feb. 20 (Bloomberg) -- Sharper Image Corp., the seller of $300 electric shavers and $1,999 massage chairs, filed for bankruptcy protection after losing money in 11 of the last 13 quarters.

The 31-year-old retailer will shed 90 stores while it deals with a ``severe liquidity crisis,'' Chief Financial Officer Rebecca Roedell said in papers filed last night in U.S. Bankruptcy Court in Wilmington, Delaware. Sharper Image has lost more than $135 million since early 2005 on bad publicity stemming from lawsuits over its Ionic Breeze air purifiers and ``ever-tightening'' credit markets, the company said.

Former Chairman Richard Thalheimer founded Sharper Image in 1977 and built it into a company with 184 stores by selling gadgets such as the Ionic Breeze and $100 shaving mirrors. By January, sales had fallen every quarter for three years, and the San Francisco-based retailer brought in turnaround specialists to run the company last week.

The chain ousted Thalheimer, 59, in 2006 after losing more than three-quarters of its stock market value. Sharper Image, which peaked at $39.98 in February 2004, closed at 41 cents, down $1.03, in Nasdaq Stock Market composite trading.

The company listed assets of $251.5 million and debt of $199 million and is in negotiations to sell its most unprofitable stores and inventory. It competes with Brookstone Inc. and New York-based Hammacher Schlemmer.

Loan Approved

The retailer received court approval to borrow as much as $35 million to keep operating while in bankruptcy. U.S. Bankruptcy Judge Kevin Gross today approved the financing, which was arranged by Wells Fargo & Co. Gross scheduled a March 7 hearing to consider final approval of the $60 million loan.

Another retailer, Virginia Beach, Virginia-based catalog company Lillian Vernon Corp., also filed for bankruptcy protection with a plan to sell its assets to help pay creditors.

At the Sharper Image's biggest New York City store, located at 57th Street near Fifth Avenue in Manhattan, three people were shopping at mid-morning. One of them, Avis Victor, said she was there to buy a $29.95 nose-hair trimmer for her husband.

``It's sad to see a name like this go down,'' Victor said. ``They haven't been doing well for quite awhile. I'm glad I got in today while I still can.''

The retailer filed papers requesting approval of a $60 million loan, which is being arranged by Wells Fargo & Co. Sharper Image asked for permission to borrow as much as $35 million on an interim basis.

CEO Replaced

Sharper Image said last week that it replaced Chief Executive Officer Steven Lightman with turnaround specialist Robert Conway and hired consultants from Conway's firm, Conway, Del Genio, Gries & Co., to make unspecified changes.

The 20 largest unsecured creditors are owed $27.1 million. The five biggest are United Parcel Service, owed $6.7 million; Quebecor World (USA) Inc., owed $3.6 million; Tom Tom Inc., owed $2.1 million; Garmin International Inc., owed $2.1 million and; Novus Print Media Inc., owed $1.7 million.

Tom Tom and Garmin are the world's biggest makers of car- navigation systems, which Sharper Image sells at its stores.

The case is In re Sharper Image Corp., 08-10322, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporters on this story: Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net; Erik Larson in New York at elarson4@bloomberg.net.

Last Updated: February 20, 2008 23:40 EST