Playboy confronting naked truth about future

NEW YORK - Playboy Enterprises Inc, publisher of one of the world's best known adult magazines, posted a wider fourth-quarter loss, hurt by $157.2 million in restructuring and other one-time costs, as well as weaker-than-expected revenue.

The company, which posted a net loss in each quarter of 2008, also said it would be open to discussions about an outright sale of the company, or changes in the strategic direction of the flagship Playboy Magazine.

Net loss for Playboy, which in recent months has seen a management shake-up including the resignation in December of longtime Chief Executive Christie Hefner, was $145.7 million, or $4.37 per share. This compares with a loss of $1.1 million, or 3 cents a share, in the year-ago period.

Revenue declined to $69.8 million from $85.9 million, due in part to the sale of its television studio assets.

Analysts had expected revenue of $73.7 million, according to Reuters Estimates.

In the fourth quarter, the company said its Entertainment Group profit doubled to $5 million, due to improved profitability in its domestic TV business. Revenue in the unit fell 21 percent.

In its licensing unit, which is responsible for placing the company's iconic bunny ears logo on everything from T-shirts to diamond pendants, income declined 38 percent to $4.3 million.

Last month, Playboy said it would cut jobs, consolidate online and print operations and take a writedown as the company struggles with a declining audience in a poor economy. The company cut 14 percent of its workforce in 2008.

"The results of our (cost-cutting) efforts to date should be meaningful, but in the face of current economic conditions, it is clear that our streamlining initiatives need to continue," interim Chairman and Chief Executive Officer Jerome Kern said in a statement.

Playboy said it expects to mark additional charges in 2009, including a noncash impairment charge of about $5.0 million in the first quarter. In the first half of 2009, the company expects to record about a $9.0 million charge relating to the closing of its New York office.

On a conference call with analysts, Kern said the company is "actively engaged" in a CEO search. Hugh Hefner, the company's 82-year-old founder and father of Christie Hefner, still oversees Playboy magazine as editor-in-chief, from the lengthy articles to the jokes page, cartoons and the airbrushing of the nude layouts.

Playboy's shares rose marginally on Wednesday, gaining 5 cents, or 3.3 percent, to $1.55 on the New York Stock Exchange.

Copyright 2009 Reuters.

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