Inc. magazine has a story on why Sharper Iamge went bankrupt and why brick-and-mortar stores are in for a rude 2008. Obviously, gas and food price increases are hurting consumers. In addition, mortage, taxes, and insurance rate hikes have taken a bite out of disposable income. The money belt is tightening.

On the business side of things, as Starbucks just realized, chains opened too many stores. It’s tough to staff and increase same store sales, but Wall Street wanted growth. (One more reason to go private). Other reasons are that exclusive deals and product innovation are harder to come by. The surprise for me was this:

“What happened at Sharper Image? One of the biggest challenges that Sharper Image faced in the past five years was that the Apple store took over as the place to hang out and play with gadgets in the mall. We were lulled into a period of complacency because of the success of the Ionic Breeze.”

What can you take away from this? Well, innovate for one. Watch the marketplace / economy / industry / trends. Don’t get complacent. As Tom Peters says: “Re-Invent or Die”.