PLAYBOY BUNNY GETS ENERGIZED
PLAYBOY’S CONSUMER PRODUCTS DIVISION DRUMMED UP $200 MILLION IN SALES LAST YEAR

Byline: Kristi Ellis

LAS VEGAS — Playboy Enterprises, a pioneer in the sexual revolution of the Sixties, is closing the chapter on fuzzy dice and cheap novelty items.
The company, which has generally been considered tasteful in its treatment of sex — especially compared to what’s out there today — is rolling out an aggressive expansion plan with a new lineup of licensed products, many aimed at hip women.
In the next year, Playboy plans to open a Tokyo flagship, launch a women’s intimates collection, expand its e-commerce site domestically and internationally and may sign a master licensing agreement for Italy or Europe with Fiorucci.
At the helm of all this is Christie Hefner, chairwoman and chief executive officer, whose efforts toward reinventing the brand and developing a consumer products division translated into sales of $200 million last year.
In light of the proliferation of racy images on the Internet as well as in advertising, Hefner claimed that the timing is right to position the brand, which has fielded its share of controversy over the years, in mainstream distribution channels throughout the country, including conservative bastions in the South and Midwest.
“I feel that the time is terrific,” said Hefner. “The fact that not only the fashion industry but the culture generally is more comfortable with sexy, provocative imagery creates greater distribution opportunities. And at the same time, the authenticity, heritage and mystique that Playboy has are unique.”
Although many might speculate about a possible backlash from retailers in the Bible Belt and Midwest, Playboy has not met resistance from specialty chains, according to Aaron Duncan, vice president and creative director of product marketing for Playboy.
Approximately half of the 2,000 doors carrying Playboy products are located in the Midwest, he said.
“We are a liberal company and a big fighter for first-amendment rights,” said Duncan. “The brand is not for everybody, but it will reach a large portion of American consumers.”
In its next phase, Playboy will target department stores, though it does not plan to sell its fashion apparel to mid-tier stores such as J.C. Penney and Sears, Duncan said.
“The brand is controversial, but that creates a demand,” he said. “People [teens] always want to wear something daring from their parents’ generation.”
In an interview during the WWDMAGIC trade show at the Mirage Hotel here, Hefner laid out her vision for the company founded by her father, Hugh Hefner, whose rabbit head logo has become an American icon of the sexy high life.
Christie Hefner, who became president in 1982 and chairwoman and ceo in 1988, relaunched the licensing program two years ago and established a “proactive marketing approach” that focuses on the quality of the products, a customer profile and appropriate retail distribution.
She initiated the changes soon after her arrival at the top, placing the licensing program on hold and purging the market of what she considered shoddy products.
“At the time, the company had a licensing program but a lot of it was built around easy money and collecting the checks,” she recalled. “On the one hand, we had a magazine that retained its position of very high quality and excellence in photography, journalism and art. On the other, we had Playboy-branded fuzzy dice hanging from the taxi driver’s rearview mirror.”
Appealing to women is part of the new strategy, as well as a clicks-and-mortar expansion.
Playboy has chosen Tokyo for its first flagship, as well as four to eight in-store boutiques that are slated to open in the Japanese capital within the year. But don’t expect to see the kind of kitschy theme store and restaurant concepts that are a throwback to the Sixties. This is not your father’s Playboy.
“We declined offers to do our version of the Fashion Cafe back in the Eighties,” she said. “Now we are in a different position in terms of creating a sustainable business that will be a destination.”
Playboy hired Peter Arnell, chairman and chief creative officer of AG Worldwide, and Surge Interactive, a New York marketing and advertising firm, to create a store concept. Securing the location is Mitsui & Co., Japan’s largest general trading company and the holder of Playboy’s master license for the past 25 years, along with Superlovers, the Japanese licensee of Playboy apparel and accessories.
The long-standing relationship with Mitsui prompted the roll-out in Tokyo.
But dominating the U.S. is the next step, with plans for flagships and in-store shops.
On the Internet side, the company recently announced a joint venture with Germany-based Focus Digital AG to launch the Playboy.de Web site in the coming months.
Playboy will also expand and redesign its profitable e-commerce site, Playboystore.com, launched April 1996. Among the new segments planned are “For Her” and “For Him” shops, as well as promotions around Valentine’s Day, Christmas and back-to-school. Playboy currently has about 3,000 sku’s.
The next frontier: Europe.
Riccardo Rosa, a U.S. consultant for Milan-based Fiorucci, said Elio Fiorucci, the company’s founder, personally ordered Playboy denim, T-shirts and lingerie at WWDMAGIC last month. He will initially test the Playboy products in the Milan flagship and Verona store.
“Playboy and Fiorucci have the same philosophy,” said Rosa. “We cater to young, trendy people.”
Rosa confirmed Fiorucci might sign a master licensing agreement next year to produce Playboy T-shirts, jeans and lingerie in Italy.
Indeed, licensed products are a key growth area. The Playboy stable currently includes sportswear, belts, handbags, jewelry, swimwear, barware and men’s underwear. Women will soon have their own innerwear, as well as sleepwear and lingerie, produced by its existing sportswear licensee, California Sunshine.
“In any one of those areas, if you do it right, you ought to have meaningful double-digit growth,” said Hefner.
She plans to stay in tune with the youth market to achieve those goals.
“Even though there are people who grew up with the magazine who are in their 50s, that isn’t who is going to identify with the brand,” said Hefner. “The product needs to be targeted young.”
Generation Y is already accessing available Playboy merchandise at specialty stores, including Gadzooks and Urban Outfitters.
Logoed T-shirts, swimwear and accessories sell in all Gadzook’s 377 doors, said Jackie Randall, divisional merchandise manager of juniors for the chain. The Dallas-based specialty retailer, which will open 17 additional stores this year, has carried the lines for a year.
“It is one of our top performers,” she added. “The bunny is certainly the icon that is recognizable and it is getting positive response.”