Guthy-Renker Plans Major Move into Hard Goods

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Guthy-Renker Corp., the DRTV marketing company based in Palm Desert, CA, plans a major move into the hard goods categories of housewares and hardware products.

The company created two new positions in its headquarters to oversee product and infomercial development in the category. It plans to fill those positions in the next few weeks.

"Guthy-Renker historically has not been a strong player in the hard good category," said Jeff Engler, director of product development at the company, "except that we've had the fitness category and the Metrinch [a tool kit]. Both have been very successful for us."

He said the move into hard goods is driven by the company's expansion into overseas markets. Guthy-Renker has enjoyed infomercial successes with such "intellectual property" products as the Tony Robbins series of motivational tapes and with such skin care items as Victoria Principal's "Principal Secret" -- but those kind of shows present difficulties in reaching overseas markets. Intellectual property infomercials that feature a charismatic personality tend not to translate well into foreign cultures, while cosmetic products are difficult to import into some countries because of regulatory hurdles.

The advantages of hard good products are that they are generally easier to demonstrate in an infomercial and easier to export to foreign countries.

"Hard goods in the United States is a tough business," Engler said. "The margins are tight and you need stronger media ratios, but Guthy-Renker is a global company and we need to have a merchandising strategy that supports a global market. The export in hard goods is very good."

One domestic difficulty with hard goods is that they are prone to being "knocked off" by competitors, but Guthy-Renker hopes its global scope will give it an overall advantage in posting strong margins on the products. The company co-produced two infomercials with Bissell Corp., Grand Rapids, MI, that roll out nationally this quarter, following an infomercial launched last year for a knife set called Chef's Knifes.

Guthy-Renker also sells hard goods through its short form DRTV marketing company, Guthy-Renker Direct, based in Santa Monica, CA, but Engler said there should not be much overlap between that company and the new hard goods infomercial group.

"If there's a project to be done in short form, it will be done through Guthy-Renker Direct," Engler said. "My team is not executing short form strategy."

A Guthy-Renker competitor reacted to Guthy-Renker's plans with equanimity.

"If they jump in and become a competitor, it's fine," said A.J. Khubani, president of TeleBrands Corp., a DRTV marketer in Fairfield, NJ. "They're a good bunch of people to be competitors."

Said Engler: "We have a number of shows in production now. You're going to see a consistent flow of hard goods."

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