PALM DESERT, Calif., Feb. 19 /PRNewswire/ -- Guthy-Renker, the nation's largest marketer of products via infomercial, today
acknowledged that it filed suit against National Media Corp on February 10 for allegedly committing fraud, breach of contract and
negligent misrepresentation in connection with Guthy-Renker's hugely successful Fitness Flyer exercise equipment. The dispute
increases friction between the infomercial industry's two largest companies whose fortunes have recently been heading in opposite
directions: National Media's stock has dropped in value by roughly two-thirds in the last year.
The current dispute arose, according to Guthy-Renker, from National Media's violation of an agreement to market Fitness Flyer on a
limited basis in the United States as well as National Media's subsequent creation and marketing of two similar products. Guthy-Renker
owns the Fitness Flyer intellectual property rights and granted National Media limited rights to distribute the Fitness Flyer product.
"As we allege in our complaint, National Media concealed its intentions to distribute two knock-off products and its actions are in
violation of our agreement," said Ben Van de Bunt, executive vice president of Guthy-Renker. "We are surprised National Media, the
only publicly traded company in our industry, would engage in this type of conduct."
Guthy-Renker is the largest domestic producer of high-quality infomercials and products designed for home shopping and direct
response television sales with annual sales in excess of $300 million. The company is based in Palm Desert, Calif. and was co-founded
in 1988 by Bill Guthy and Greg Renker. Guthy and Renker have been cited as among "America's Smartest Young Entrepreneurs" by
Fortune magazine and received a regional Entrepreneur of the Year award from Inc. magazine. The company enjoyed a 100 percent
growth in revenues in 1996, a year in which the company won six NIMA industry awards, including Infomercial Of The Year.
SOURCE Guthy-Renker |
