Playboy Narrows Net Loss

CHICAGO: Third-quarter net loss at Playboy Enterprises fell to $1.1 million from $6.2 million last year, while the company’s revenues decreased to $56 million from $70.4 million.

Scott Flanders, the company’s CEO, commented: "The Playboy brand is an amazing asset that is unique in its global range, flexibility and demographic appeal. My goal is to better manage the power of this brand to accelerate the growth of our licensing business, create new momentum in our media businesses and develop a more efficient business model. "In Licensing, we expect to see year-over-year profit growth in the fourth quarter, despite the continued weak economy. Increased fragrance sales through our Coty partnership, the launch of consumer products in selected new territories globally and the planned year-end opening of a new entertainment venue in Cancun, Mexico, should help benefit fourth quarter results."

He continued: "On the media side, we believe that industry trends will contribute to lower fourth-quarter results. Although the improved third-quarter results demonstrate the significant strides we have made in reducing the cost structure of our mature media businesses, more is needed. Playboy magazine will remain the flagship of this company, and a powerful content generator, but it needs to operate more efficiently. We already announced that we will lower the magazine’s rate base effective with the January/February 2010 issue, and we are looking at other opportunities to improve profitability. Entertaining our readers and supporting our advertisers will remain a critical focus, and we expect to expand the reach of our integrated print and digital offerings, using social networks, new mobile partnerships and interactive games to create new revenue streams. We also are looking at ways to reposition the Playboy TV network for future growth.

"Like other companies, we confront a changing media landscape and a weak global economy," Flanders continued. "But we also face challenges that are unique to our small size and lack of scale. I believe that we need to focus on the things that we do well, like creating content, while handling other functions through partnerships or outsourcing agreements that will provide the economies of scale and expertise we need to operate more efficiently. The outsourcing of magazine circulation and e-commerce were the first in a series of steps needed to accomplish that goal. More work lies ahead."

The Entertainment Group reported segment income of $2.3 million, a 37-percent increase thanks to cost-cutting efforts. Revenues fell to $24.4 million from $27.3 million in the prior year, with U.S. TV revenues falling to $12.5 million and international TV revenues decreasing to $10.7 million.