Categotry Archives: Business

Robert Charles Joseph Edward Sabatini Guccione, the founder and former chief executive of Penthouse magazine, was a man who took calculated risks. Some paid off, others cost him millions.
The Brooklyn native originally planned to become a Catholic priest, and even attended the seminary, but dropped out when puberty caused his hormones to kick in. He wed at 18 and fathered a daughter named Toni, but the marriage foundered, and Guccione headed to Europe to work as a painter and journalist. He wed a second time, to British singer Muriel Hudson, and fathered four more children (Bob Jr., Nina, Anthony and Nick); however, his habit of amassing large debts ended that union.
Unable to make a decent living as an artist, Guccione next decided to try his luck at pornographic publishing. With less than $2,000 on hand, he launched Penthouse in 1965 as a low-brow competitor to Playboy, the glamorous adult magazine run by Hugh Hefner. In the magazine’s early years, Guccione couldn’t afford professional talent so he ended up photographing most of the models. He enjoyed pushing boundaries with each spread, and bragged about his decision to publish “lesbians, threesomes, full-frontal male nudity, erect penises.” Tabloid journalism, a racy letters column and beautiful centerfold models known as “Pets” helped Penthouse find an audience in the U.K. and the U.S. At its peak in the 1970s, Penthouse reportedly sold nearly 5 million copies a month.
Penthouse also inflamed the public’s passions with its controversial offerings. Feminists and conservatives blasted its raunchy content. In 1984, the magazine ran a sexually explicit pictorial of Vanessa Williams, the first black woman to win the title of Miss America. The pictures cost Williams her crown, but generated $14 million in profit for Guccione.
A year later, Guccione offered the serial killer known as The Unabomber a monthly column in Penthouse if he promised to stop taking lives. Ted Kaczynski, a.k.a. The Unabomber, gave Guccione permission to print his unedited manifesto, but with one caveat: he reserved the right to murder one more person. Guccione refused to take the bait. A tip from Kaczynski’s brother led to his capture in 1996. Kaczynski later pleaded guilty to 10 counts of illegally transporting, mailing and using bombs and three counts of murder, and was sentenced to life in prison with no possibility of parole.
Penthouse began to lose readers in 1986 when U.S. Attorney General Edwin Meese’s Commission on Pornography issued a report attacking the adult entertainment industry, prompting newsstands and convenience stores to pull the publication from their racks. In the 1990s, sales took a hit as subscribers began to seek out free porn and X-rated video online.
Although Guccione was once listed in the Forbes 400 ranking of wealthiest people ($400 million net worth in 1982), bad investments and risky ventures eventually cost him much of his fortune. He spent $17.5 million producing an X-rated version of “Caligula.” The 1979 film, which starred Malcolm McDowell, Helen Mirren, John Gielgud and Peter O’Toole, tanked at the box office. He tried to open a $200 million casino in Atlantic City but a stubborn resident and a licensing issue stalled construction for years. Guccione was forced to pay $45 million in back taxes in 1985 and another $80 million in 1992. And in 2003, General Media, the publishing arm of Penthouse International, declared bankruptcy.
His personal life was no less tumultuous. Guccione’s third wife, Kathy Keeton, an exotic dancer who was entrusted with the financial management of his publishing empire, died in 1997 from breast cancer. Her death affected him deeply. He wed a fourth time in 2006, to exotic dancer April Dawn Warren, but spent much of their marriage battling throat and lung cancer. Relations with some of his children also fell apart over money matters. In recent years, soaring debts forced Guccione to sell off many of his possessions, including an impressive art collection and his 27-room mansion in Manhattan.
Guccione died on Oct. 20 of lung cancer. He was 79.

Donald Edward Goerke, the “Daddy-O of SpaghettiOs,” died on Jan. 10 of heart failure. He was 83.
Born in Waukesha, Wis., Goerke served in the Army Air Force during World War II, then earned a bachelor’s degree from Carroll College and a master’s degree from the University of Wisconsin. He started his career in marketing as a researcher for the Blatz Brewery before landing a marketing analyst job at the Campbell Soup Company.
During his 35-year career with Campbell’s, Goerke introduced more than 100 products, including Chunky Soup, a hearty ready-to-serve soup that “eats like a meal.” This product was a radical departure from the company’s traditional line of condensed soups, which require the addition of either milk or water.
But Goerke was best known for inventing SpaghettiOs, a reheatable pasta covered in a sweet tomato and cheese sauce. In the early 1960s, he and his team began brainstorming ways to make canned pasta more appealing to children. After considering various shapes, including stars and rocketships, Goerke decided to keep it simple and sell pasta that looked like a tiny “O.”
The product was an instant hit with American families when it launched in 1965 with the catchy commercial jingle, “Uh-oh, SpaghettiOs.” Parents and children both liked the fact that the food was “spoonable,” easy to make and fun to eat. Today, more than 150 million cans of SpaghettiOs are sold each year. SpaghettiOs now come in five variations (original, pasta with meatballs, pasta fortified with extra calcium, RavioliOs and pasta with sliced franks) and two other shapes (A to Zs and fun shapes).
Although he left the company in 1990, Goerke came out of retirement five years later to help promote the 30th anniversary of SpaghettiOs on “The Today Show” and “What’s My Line?”
Goerke was described by friends and family as kind, even-tempered, outgoing and loyal. He was active in community affairs and served as the former president of the Merchantville, N.J., school board. The husband, father, grandfather and avid golf player was also an active member of the Riverton Country Club in Cinnaminson, N.J.

Stephen Francis Bernard, co-founder of the Cape Cod Potato Chips company, died March 7 of pancreatic cancer. He was 61.
The New Hampshire native earned an economics degree from the University of Notre Dame, then spent the next few years traveling around the country and doing odd jobs. Determined and innovative, he fought forest fires, fished for tuna, ran an auto parts business, sailed to the Turks & Caicos Islands and opened a natural foods store.
In 1980, Bernard and his wife, Lynn, began serving kettle-cooked potato chips at their shop in Hyannis, Mass. Made from potatoes grown on Maine farms and fried in small kettles, the thick chips cooked up crisper and bulkier than ordinary chips. Free samples found favor with locals and tourists alike, but the Bernards struggled to make ends meet until a motorist drove into their front window — and almost hit their daughter. News coverage of the accident bought customers to the door, and soon people from all over New England were visiting the shop to eat and buy their snacks.
Knowing they had a winner on their hands, the Bernards founded Cape Cod Potato Chips. Over time, their factory became a top tourist attraction in the region, one that welcomed 250,000 visitors annually. The company also expanded its product line to include other kinds of chips including: sea salt & vinegar, sea salt & cracked pepper, buttermilk ranch, mesquite barbecue, jalapeno & aged cheddar, blue corn, white corn, cheddar jack & sour cream, veggie tortilla and reduced fat.
Anheuser-Busch bought Cape Cod Potato Chips in 1985, and operated it as a division of its Eagle Snacks unit. By the following year, up to 80,000 bags were sold each day in the U.S. and Canada, with annual sales of $16 million. But when Anheuser-Busch dissolved its snack food division, the Bernards bought it back. They owned the company for three years before selling it to Lance Inc. in 1999.
In the final years of his life, Bernard enjoyed gardening, fly fishing, watching Notre Dame football and playing mini golf with his grandsons. He also co-founded Late July Organic snacks, with his daughter Nicole Dawes in 2001. Friends and family remembered him as a loyal, passionate, adventurous and principled man.

Richard Knerr, a businessman who brought joy to millions of children around the world, died on Jan. 14 from complications of a stroke. He was 82.

The California native was a teenager when he befriended Arthur “Spud” Melin outside a Pasadena movie theater. The pair, who would remain lifelong pals and business partners, attended the University of Southern California but had no interest in joining their fathers’ companies after graduation. Instead, they started a small business training falcons. Few customers wanted to buy the birds, yet many were intrigued by the homemade wooden slingshots used to feed the creatures. So Knerr and Melin launched Wham-O Inc. in 1948, naming the business for the sound a slingshot makes when it hits its target. Its motto: “Our Business Is Fun.”

Over the next four decades, Wham-O expanded into other sporting goods and toys, including the bouncy Superball, the Slip ‘N Slide water slide, the Water Wiggle sprinkler, the Limbo Game and Silly String. But their most prominent contribution to the world of toys was a large ring called the Hula Hoop. A fad was born the moment kids placed the hoop around their hips and started swaying. Within four months of its 1958 release, Wham-O sold more than 25 million units. By 1960, 100 million Hula Hoops had sold.

Another popular product made its way into Americana after Knerr and Melin discovered Walter “Fred” Morrison playing with a flying disk on a beach in 1955. They immediately bought the rights to the disk, made some simple modifications and renamed it. The Frisbee instantly found a niche on college campuses and with dog owners. It also sparked the creation of an Ultimate Frisbee competition. To date, the company has sold more than 100 million Frisbees.

Not all of Wham-O’s products found an audience or became a craze. The company’s $119 do-it-yourself fallout shelter, which was marketed during the height of the Cold War, sold very few units. Wham-O did accept millions of orders for its Instant Fish aquarium kit, but the African fish refused to mate so the product was discontinued.

Wham-O was purchased by the Kransco Group Companies in 1982, earning Knerr and Melin $12 million for their endeavors. Melin died in 2002 at 77. In 1994, Mattel acquired Wham-O from Kransco; three years later, a group of investors bought it back and made it an independent company once again.

Self-made roofing magnate Kenneth Albert Hendricks died on Dec. 21 after falling through the roof of his garage. He was 66.

Born in Janesville, Wis., Hendricks learned the roofing trade by working side-by-side with his father. Although he aspired to become an architect, life changed his plans.

Hendricks dropped out of high school at 17 when his girlfriend Diane became pregnant. To make ends meet, he worked two jobs: driving a repair truck for Wisconsin Power & Light and doing roofing gigs on the side. By the time he was 21, Hendricks was able to quit the power company and hire his own roofing crews. Within a decade, he had approximately 500 roofers working for him.

Hendricks married Diane and together they raised seven children. She fully supported his personal and professional endeavors and even started her own insurance company to sell low-cost policies to his contractors.

The hassle of dealing with multiple suppliers around the country inspired Hendricks to open a national supply distribution chain in 1982. Based in Beloit, Wis., American Builders & Contractors Supply employs 6,000 employees in nearly 400 locations and does about $3 billion in business a year. The company, which recently celebrated its 25th anniversary, is the largest wholesaler of roofing supplies in the United States. Ken and Diane also owned a variety of businesses through the Hendricks Holding Co., and a property development group with more than 25 million square feet of industrial and commercial real estate. In 2006, Inc. magazine named him the Entrepreneur of the Year.

Despite being the 91st richest man in America — he was worth about $3.5 billion — Hendricks remained true to his blue collar roots. He wasn’t a member of a country club nor did he fly first class. He didn’t have a secretary, and was known for giving out his cell phone number to any employee who needed it. In his spare time, he enjoyed riding his motorcycle, spending time with friends and family and improving his community.

Hendricks was checking on the progress of construction on the roof over his garage when he fell through, suffering massive head injuries. Diane performed CPR until the police and paramedics arrived. Hendricks later died at Rockford Memorial Hospital in Winnebago County, Ill. A public viewing was attended by thousands of mourners.

“Ken was a true visionary who wanted the best for his hometown,” Wisconsin State Sen. Judy Robson said. “I respected Ken for his love of old architecture and industrial artifacts. That love drove him to preserve and transform some of our landmark properties in Beloit rather than bulldoze them. He helped turn blight into bright.”