Guthy-Renker
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| Private | |
| Industry | Direct Marketing |
| Founded | 1988 |
| Headquarters | El Segundo, California |
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Area served
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Worldwide |
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Key people
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Bill Guthy and Greg Renker, founding principals and co-chairmen, Rick Odum CEO |
| Revenue | $1.8 billion (2012) |
| Website | www.guthy-renker.com |
Guthy-Renker (pronounced: Guh-thee Ren-ker) is a El Segundo, California, based direct-response marketing company that sells products directly to consumers through infomercials, television ads, direct mail, telemarketing, e-mail marketing, and the Internet. As of 2014, it has 8 different product groups, with an emphasis on celebrity-endorsed beauty products.
Guthy-Renker was founded in 1988 by Bill Guthy and Greg Renker. In 1995, it began distributing the acne treatment Proactiv, which became responsible for more than half its revenues by 2005. The company also created seven subsidiaries in the late 1990s for different products and advertising channels. It founded an infomercial channel, GRTV, which was sold to TVN Entertainment Corporation in 1999. Guthy-Renker's revenues grew from $400 million in 2001 to $1.5 billion by 2009. It formed a joint venture with Nestle Skin Health in 2016 whereby Nestle now manages Proactiv.
Guthy-Renker was founded in November 1988 by Bill Guthy and Greg Renker, who met at the Indian Wells Racquet Club and Resort in Indian Wells, California. They considered starting an infomercial company after an order was placed at Guthy's cassette duplication company, Cassette Productions Unlimited, for 50,000 copies of a real estate lecture to be sold through infomercials.
At the time many infomercials mimicked talk shows and investigative news specials, raising concerns among consumers and policy makers that the programs were misleading. To avoid the controversial practice, Guthy-Renker disclosed that their infomercials were paid advertisements at the beginning of each program. It made professional-quality productions. Renker was invited to testify to a Congressional subcommittee in 1990 regarding ethics in advertising, which led Guthy-Renker and others to form the National Infomercial Marketing Association to create industry standards.
The following year, the firm had to cut back operations, because news coverage of the Persian Gulf War drew viewers away from infomercials.Ron Perelman of Forbes Holdings Inc. bought a 37.5 percent share of Guthy-Renker in 1993 in exchange for $25 million and priority access to air-time on Perelman's television stations. At the time, Guthy-Renker had grown to $60 million in revenue. In 1996, Perelman's stake in the company was resold to News Corp and Guthy-Renker bought it back. Two years later, Goldman Sachs bought a stake in the company that valued Guthy-Renker at $3 billion, and a Japanese trading company, Nissho Iwai Group, bought a 17 percent portion of Guthy-Renker's Asia subsidiary for $9 million. Guthy-Renker created a television station for infomercials called GRTV in 1996, which was sold to TVN Entertainment Corporation in 1999.
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