Playboy Enterprises Inc. posted a net loss of $1.1 million for the fourth quarter ending December 31, 2007, and an operating loss of $1.9 million for the same period, with major losses coming out of its publishing arm.
Playboy representatives could not be reached for comment as of press time.
The loss is partly attributed to a $1.9 million charge from asset sales, though the $1.5 million in losses posted by the company’s publishing group also contributed. Newsstand revenues for Playboy magazine were flat this quarter, and subscription revenues declined. Total circulation revenues were down 5% to $12.6 million, and ad revenues fell by 3%, to $8 million.
In response, the company has slashed the rate base of its eponymous men’s glossy, effective January 2008. That move led to a 13% decline in ad rates.
Playboy chairman and CEO Christie Hefner vowed to refocus the company and build only on those initiatives that showed the most promise for revenue growth.
The company will boost its online and mobile efforts, investing in technology, marketing and content. With full-year licensing income up 40% in 2007, the company will also focus on its strengths in merchandising and entertainment venues. The Playboy product line will expand and up distribution, and the company is considering opening Playboy concept stores. A deal for a new Playboy entertainment venue is expected to close later this year.
To combat lags in its domestic TV business, Playboy is selling its Andrita Playboy television studio in a deal to be completed next month. It is also outsourcing its e-commerce and catalog business.
Net income for Playboy Enterprises Inc. in 2007 was $4.9 million, compared to 2006 net income of $2.3 million.
