LOS ANGELES — The party had just started for Hugh Hefner at Hyde Lounge, a favorite celebrity club here.
Flanked by two buxom blondes, the 81-year-old founder, chief creative officer and editor in chief of Playboy magazine surveyed the crowd: indie rockers, centerfold models squeezed into jewel-toned Playboy Bunny uniforms, "Rush Hour" director Brett Ratner and members of Young Hollywood, including Enrique Iglesias and Kelly Osbourne. Minutes earlier, actor Joaquin Phoenix showed for the first time the four short black-and-white promotional movies he directed that highlight the new jewelry collaboration between Playboy and an edgy Los Angeles label called White Trash Charms.
With revenue from publishing and entertainment ventures declining, Playboy Enterprises Inc. — Hefner's daughter, Christie Hefner, is chairman and chief executive officer — is seeking to be hip and relevant through collaborations with trendsetting West Coast fashion labels.
In addition to White Trash Charms, the company is partners with Topless California in reproducing images of a fictitious character named Femlin, created by artist LeRoy Neiman for Playboy in 1957, on T-shirts retailing for $67.50. It also signed a five-year apparel licensing contract through 2011 with Los Angeles' Unger Fabriks, which is infusing the line with trendy details such as brushed French terry and overdyeing, and launching an activewear label, dubbed Playboy Physical, for spring.
These projects are key in wooing women, since apparel, lingerie, swimwear and cosmetics constitute 60 percent of Playboy's $800 million in global retail sales of licensed products.
"The younger generation is the future,'' said Hugh Hefner, who wore a striped button-down shirt accessorized with Playboy's rabbit head-shaped cuff links under a black Giorgio Armani suit. "Any brand — and it's true for Playboy — has to renew itself. "
Licensing from clothing, Playboy-branded stores and other products made by some 130 global licensees is a small but growing source of revenue. Playboy reported net income of $2.3 million, including corporate expenses, on revenue of $331.1 million last year, compared with a net loss of $735,000 on revenue of $338.2 million in 2005. Licensing revenue grew 19 percent to $33 million last year compared with 2005. During the same period, entertainment revenue fell less than 2 percent to $201 million and publishing revenue from the magazine, which has an estimated monthly U.S. circulation of three million, decreased 9 percent to $97.1 million. Licensing income grew 18 percent to $18.9 million, entertainment income dropped 43 percent to $23.3 million and the publishing loss narrowed to $5.4 million from $6.5 million. Playboy said it expects revenue and income from licensing to increase between 15 and 20 percent this year.Retailers such as Fraser Ross, the owner of Kitson in Los Angeles, said Playboy has made the right move to appeal to younger customers by collaborating with White Trash Charms, which does well at his shop. Although he said the 14-karat gold-plated and sterling silver renditions of a woman sporting bunny ears in a 3-D cage and other jewelry designs were "over the top," the talismans were updated with an edge that "makes [Playboy] more marketable."
Since starting the magazine in 1953, Hefner has tried to make Playboy accessible for each generation. He marketed cuff links in 1955 as his first lifestyle-branded merchandise because he said he recognized then that "the Playboy brand was more than the magazine." With the advent of the Internet, he took his adult content online. In 2005, Hefner began starring in a reality TV show, "The Girls Next Door," which is in its third season on the E network. Women between the ages of 18 and 34 make up about one-third of the show's 570,000 weekly viewers, according to Nielsen Media Research.
After closing the last Playboy Club in 1986, Chicago-based Playboy resurrected the nightclub with a venue at the Palms Casino Resort in Las Vegas last year. A movie, titled "Playboy," about Hefner's life is also in the works under the direction of Ratner and produced by Oscar winner Brian Grazer. Playboy said it will open a Playboy Mansion offering gaming, dancing and a pool in Macao, China, in late 2009, with plans to unveil more at the rate of one a year.
In addition, Playboy has rolled out retail stores through licensees. Adrianna Chinnici, vice president of Playboy's licensing group, said the company's strategy is to open three stores a year globally for the next three years, adding to its current eight units, including two in Las Vegas.
Still, Playboy's modern makeover doesn't appeal to everyone. Fred Levine, owner of the eight-door specialty shop chain M. Fredric in Agoura Hills, Calif., said novel T-shirts screen-printed with montages of Playboy magazine covers from the Fifties and Sixties flopped last year. What's more, he must be careful not to offend customers with Playboy's sexual — and consequently sexist — connotation."Even though my women are into fashion, they're also astute and pro-women's rights,'' he said. "A lot of our customers are soccer moms and working women....The last thing you want to do as a retailer and a person is offend the person who is responsible for how you make a living."
Such sensitivity among retailers, especially family-run department stores such as Nordstrom and Dillard's, has posed the biggest challenge for Unger Fabriks since it was granted Playboy's apparel license last year. Mark Cywinsky, Unger's merchandising director, acknowledged that it will be a slow process to convince the department stores to overlook Playboy's connection with sex. Meanwhile, Unger has forged ahead with expanding Playboy apparel into outerwear, including fake fur-lined puffer jackets, as well as activewear for yoga and Pilates.
"We want [Playboy] to mean something in the fashion industry," said Unger designer Cindy Barcelo.
In the case of Topless California, which is produced by Los Angeles' manufacturer, Mighty Fine Inc., the apparel company jumped at the opportunity to use Neiman's artwork of Femlin. "In terms of making it relevant [for today's customers], it's really about the [T-shirt] bodies and the color palettes," said Justin Watson, Mighty Fine's marketing director.
White Trash Charms designer Brooke Dulien understood her role in working with jewelry licensee Los Angeles' Lucas Design in revamping Playboy. She created about 30 pieces for summer and holiday, with retail prices starting at $14.99 for costume jewelry sold at Spencer Gifts and reaching $300 for gold-plated and sterling silver pieces at Kitson and other boutiques.
"There are two customers," Dulien said. "There is 'The Girls Next Door' [TV viewer], which is awesome. And I think there is the Nylon magazine customer — the young, street-style kid who likes to think out of the box. That's where I come into play. I come from the street style that mixes music and fashion."
Embodying a postfeminist attitude about Playboy, Dulien said the magazine has done more than publish photos of naked women. "It was a lifestyle magazine," she said.
Dulien added that she picked women like Osbourne to star in the films that Phoenix made for the White Trash Charms for Playboy line because "you choose strong, young ladies that represent beauty, fashion and sex appeal, but not in an overt, typical Playboy way."No one is happier to hear that than Hefner. "For me personally, nothing is more satisfying than [the fact that] the brand is so hot with young women," Hefner said. "That completes a circle for me."
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