Bunny hop?
Playboy is up for sale.
Or that's the word from London Fog owner Iconix
By Louisa Ada Seltzer
Nov 13, 2009
When Scott Flanders was named chief executive officer of Playboy Enterprises earlier this year, tongues began wagging almost immediately that the company was going up for sale, seeing as how Flanders had helped sell Columbia House to the Blackstone Group
The new CEO deflected talk of a sale, stressing words like "build" and "long term" in interviews with reporters.
"I will be operating the business every minute to build value for the long term," Flanders told the Chicago Tribune in June.
Still, he never outright denied the sale speculation. Now, five months after Flanders joined the company, it looks as though Playboy is indeed on the block.
Iconix is the reported bidder, and Playboy has already bared its books for the owner of London Fog and Candie's. Word of the talks leaked out yesterday, boosting Playboy's stock by two thirds and prompting lots of "I told ya so's" on Wall Street.
Playboy is more than just naked ladies, but that's always been its main draw, and the magazine has been struggling for years as pornography became readily available on the internet, and for free. Advertising and circulation at the flagship magazine were slumping well before the current recession began, and things haven't gotten much better.
Year to date, ad pages are off 35.8 percent at the magazine, according to the Publishers Information Bureau, and newsstand sales plummeted nearly 26 percent for the six months ended June 30, according to the Audit Bureau of Circulations, double the average consumer magazine decline.
That prompted the magazine to slash its rate base from 2.6 million to 1.5 million, starting with the January-February issue.
Still, while then-acting CEO Jerome Kern suggested earlier this year that the company was open to a buyout, many doubted that Hugh Hefner, who is still the company's controlling shareholder, would allow his magazine to be sold. He founded it six decades ago and has made the brand a worldwide phenomenon, encompassing everything from television to nightclubs to clothing.
Yet the 84-year-old Hefner's influence has waned a bit. Daughter Christie Hefner exited the company earlier this year after two decades as CEO, and lately Hef has seemed more visible on the E! reality series "The Girls Next Door" than at Playboy board meetings.
Perhaps the real question is how much Playboy is worth, which no one seems to agree on. That will be the deciding factor for Iconix, which will be paying as much for the Playboy name as any of its more tangible assets.
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