Playboy hit by downturn - Licensing.biz

Playboy hit by downturn

Financial performance not 'reflective' of brand's potential says interim chairman and CEO.
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Playboy Enterprises has reported a net loss for its fourth quarter ending December 31st 2008 of $145.7 million.

This compares to a net loss in the 2007 fourth quarter of $1.1 million. However, Q4 segment income was $1.1 million versus $0.0 million in the prior year quarter. The improvement reflected high entertainment profits and reduced corporate administration and promotion expense, partially offset by lower licensing profits resulting from weak consumer demand globally.

Revenues declines to $69.8 million from $85.9 million in the 2007 fourth quarter.

"Playboy continues to enjoy a unique, globally popular brand," said PEI interim chairman and CEO, Jerome Kern. "However, our financial performance is not reflective of its potential.

"Over the past several months, the company has accelerated the pace of expense reductions designed to bring our cost structure in line with current market realities and the positioning of our businesses going forward. The results of our efforts to date should be meaningful, but in the face of current economic conditions, it is clear that our streamlining initiatives need to continue."

Segment income for the licensing group was $4.3 million in the 2008 fourth quarter, down from $6.9 million in the 2007 fourth quarter. Q4 revenues were also down by $2.6 million, declining to $7.9 million in 2008 from $10.5 million in 2007.

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