For Subscribers

Get the complete article now!

TWST: Ken, what's the outlook as we move through 2000? Do you have any concern that the pace could slow down?

Mr. Gassman: Quite frankly, we're hoping that economic growth will slow a bit. The pace of economic growth has just been too rapid over the last 12-18 months -- and that which goes up rapidly can also fall rapidly. Our outlook calls for much more moderate retail sales growth in the year 2000. And we think that will come about because of higher interest rates as well as the pressure that OPEC is putting on oil prices.

TWST: Are there any other companies you'd like to highlight or focus on, Ken? Weren't you going to talk about The Sharper Image (Nasdaq:SHRP)?

Mr. Gassman: The Sharper Image is an interesting special situation in the hardline category. Again, demand for its merchandise is being fueled by baby boomers who have more income than they've ever had before and who want unusual luxury items. That's what The Sharper Image sells. The average ticket is just over 100, and consumers can afford to give The Sharper Image merchandise at Christmas or for a birthday or other special occasion. A large percentage of what the company sells are exclusive, unusual, innovative and leading-edge products that capture the imagination of the baby boomers. The Sharper Image is an attractive investment because it is not only pursuing a multi-channel strategy of distribution -- that is, stores and catalog and Internet -- but sales of its private label products are rising sharply as a percentage of the company's total revenue mix. Private-label products carry dramatically higher gross margins. Further, we're seeing substantial sales growth, and we're seeing dramatic margin and earnings growth at The Sharper Image. That's what is particularly attractive to investors.