Playboy Concedes It’s Open to Flagship Sale

More change could be in the air for Playboy Enterprises Inc., which conceded that it was more open to to an outright sale of the company or strategic change in direction for its flagship magazine in the face of challenging financial conditions.

The company made the remarks during a conference call Feb. 18 to discuss its financial results for the fourth quarter and 2008. Earlier this month, Christie Hefner retired as Playboy’s longtime chairman/CEO, fueling speculation that the company would explore a sale, merger or go private.

Playboy has accelerated cost reductions in recent months, slashing jobs and outsourcing certain functions in an effort to rein in costs. The company reported a stiff net loss of $145.7 million for the quarter, reflecting impairment and structuring charges. Its publishing segment reported a $1.2 million loss in the fourth quarter as revenue declined 11 percent on lower ad and circulation revenues at Playboy magazine, and the company said it expected ad revenues to fall 27 percent in the first quarter of ’09.  

Also on the call, Playboy also defended its board’s decision to pay Hefner $2 million in severance, noting her 30 years with the company.