Turnaround Venture Playboy Enterprises

If you have to sum up the idea of Playboy, it is antipuritanism. Not just in regard to sex, but the whole range of play and pleasure. Hugh Hefner Playboy is an American men's magazine that features photographs of women as well as journalism and fiction. It was founded in Chicago in 1953 by Hugh Hefner and his associates, and funded in part by a $1,000 loan from Hefner's mother. The magazine has grown into Playboy Enterprises, Inc., with a presence in nearly every medium. Playboy is one of the world's best known brands. In addition to the flagship magazine in the United States, special nation-specific versions of Playboy are published worldwide. The magazine has a long history of publishing short stories by notable novelists such as Arthur C. Clarke, Ian Fleming, Vladimir Nabokov, P. G. Wodehouse, and Margaret Atwood. Playboy features monthly interviews of notable public figures, such as artists, architects, economists, composers, conductors, film directors, journalists, novelists, playwrights, religious figures, politicians, athletes and race car drivers. The magazine generally reflects a liberal editorial stance. The logo, the stylized profile of a rabbit wearing a tuxedo bow tie, was originally designed by art designer Art Paul for the second issue to be used as an endnote, but was adopted as the official logo, and has appeared ever since. Playboy now is the leading mens magazine in the world, circulating more than three million copies in the U.S. and 4.5 million worldwide. The magazine contains award-winning fiction and investigation articles, in-depth interviews with gorgeous women and celebrities, and of course women and sex. The magazine is now owned by Playboy Enterprises Inc., and Christie Hefner (Hefners Daughter) is Chairman and CEO. Playboy is an international multimedia company with four income streams: publishing, licensing, online and TV. Playboy and Spice Television networks distribute programming of home video and DVD globally. Playboy.com is one of the leading male lifestyle web destinations providing entertaining articles and Playboy news, as well as subscription-based access to photos and videos. Playboy and Spice trademarks are licensed internationally for a range of consumer products such as clothing, toys, etc.

Growing Up At a very young age, Hugh Hefner was in the publishing business. While in high school, he wrote articles and illustrations for the school paper. He then started his own magazine called Shudder, which focused on short stories, comics, and book and movie reviews. He also set up a members only club for readers with five cents per year membership fee. Upon graduation, Hefner joined the U.S. Army and was put to work as a clerk where he spent the next two years. When he left the army, Hefner tried to fulfil his passion and find a job in publishing. He was, however, unable to get hired as a journalist and his idea of selling a comic strip named 'Fred Frat' about university student life was also turned town. To make money, Hefner ended up taking uninteresting jobs such as working at a cardboard-carton manufacturer. Not willing to let his dream job pass him by, Heffner continued searching and eventually landed a position (promotion copywriter) with Esquire magazine where he learned the ins and outs of publishing and marketing a magazine. Unfortunately, Esquire decided to move to New York City and close down in Chicago, and refused the five dollar raise he requested, he quit and tried to raise enough money to launch a new Chicago Magazine. Hefner's intuition told him that there was an opportunity to be had in publishing a magazine for men that focused on sex. His plan was to publish pictures of nude women - a move which had not been widely attempted for fear of being prosecuted for the distribution of obscene material through the U.S. mail. Hefner was not concerned about the legal implications and had a big plan to get the word out about his magazine.

Starting the Business Before she became famous, Marilyn Monroe posed nude for a calendar photo. Everyone in the publishing world knew about the picture but no one dared print it because of the legal risks. Hefner decided that he would take the risk and use the picture for the inaugural edition of his new magazine, Playboy in December of 1953. The original name was "Stag Party", but he was forced to change it as it was challenged as a trademark infringement by Stag Magazine. At 27 years of age, with a start-up investment of only $600 and some credit from his printing company, Hefner went to work. The first issue sold for 50 cents each and had a press run of 53,991. The entire issue was quickly sold out giving proof to Hefner's market opportunity prediction. While Playboy had been known for its nude pictures, Hefner also strove to add well-written content and attracted the likes of Tennessee Williams to author articles for him. By 1960, the magazine's circulation topped the 1 million mark.

Building an Empire With a profitable magazine flourishing for him, Hefner decided to expand his business into other areas. Two of his more successful ventures were Playboy Clubs, a chain of nightclubs, and a number of London casinos. Since reaching its peak in the 1970s, Playboy has seen a decline in circulation and cultural relevance because of competition in the field it founded first from Penthouse, Oui (which was published as a spin-off of Playboy) and Gallery in the 1970s; later from videos; and more recently from lad mags such as Maxim, FHM, and Stuff. In response, Playboy has attempted to re-assert its hold on the 1835 male demographic through slight changes to content and focusing on issues and personalities more appropriate to its audience such as hip-hop artists being featured in the "Playboy Interview". In the 1980s, however, Hefner fell upon hard times. Ronald Reagan's election victory reflected the conservative nature of Americans at the time which affected Playboy's sales, the company was forced to close its London casinos due to numerous complaints, Hefner himself was turned down by the New Jersey Gaming Commission for the license to run his newly built $150 million casino, and in 1985, he suffered a stroke. In 1988, Hefner handed the reins of the business over to his daughter, Christie (joined in1975) who turned the business around. Christie changed the focus of the magazine, which would now feature more content on fashion and entertainment. In addition, she launched Playboy TV and a pay per use Website. In June 2009, the magazine reduced its publication schedule to 11 issues per year, with a combined July/August issue and on August 11, 2009, London's Daily Telegraph newspaper reported that Hugh Hefner had sold his English Manor house (next door to the famous Playboy Mansion) for $18 m ($10 m less than the reported asking price) to a Daren Metropoulos and that due to significant losses in the company's value (down from $1billion in 2000 to $84mil in 2009) the Playboy publishing empire is up for sale for $300 m. In December 2009, they further reduced the publication schedule to 10 issues per year, with a combined January/February issue. Playboy hired Flanders, former CEO of Freedom Communications and the publisher of the Orange County Register newspaper, as chief executive in 2009. He succeeded Christie Hefner, Hugh Hefner's daughter, as CEO. Flanders has cut costs, outsourced the magazine's production except for its editorial content and struck licensing deals with clothing makers, casinos and clubs. On July 12, 2010, Playboy Enterprises Inc. announced Hefner's $5.50 per share offer ($122.5 milion based on shares outstanding on April 30 and the closing price on July 9) to

buy the portion of the company he does not already own and take the company private with the help of Rizvi Traverse Management LLC. The company derives much of its income from licensing rather than the magazine. On July 15, Penthouse owner FriendFinder Networks Inc. offered $210 million (the company is valued at $185 million), though Hefner, who already owns 70 percent of voting stock, does not want to sell. January 10, 2011 The publisher of Playboy magazine has agreed to a sweetened offer by founder Hugh Hefner to take the company private for $6.15, 18 percent premium over the price of the last previous day trading. A tender offer is expected to initial by January 21, 2011 and the deal is expected to close by the end of the first quarter. Playboy has about $115 million in debt. The transaction would free Hefner and Chief Executive Scott Flanders to pursue a turnaround strategy for the faded Playboy Empire without being accountable to Wall Street investors. Bans on the sale of Playboy In many parts of Asia, including India, mainland China, Myanmar, Malaysia, Thailand, Singapore, and Brunei, sale and distribution of Playboy is banned. In addition, sale and distribution is banned in almost all Muslim countries (except Turkey) in Asia and Africa, such as Iran, Saudi Arabia and Pakistan. However, it is sold in Hong Kong. In Japan, where genitals of models cannot be shown, a separate edition is published under license by Shueisha. Hugh Hefner is considered one of the luckiest men alive - the ultimate lifestyle entrepreneur. The factors responsible for turnaround (two times in 1988 and now in 2011) of Playboy are as follows Closing down of its London Casinos. The various bans forced on its sales in various parts of the world. Competition in the field it founded first from Penthouse, Oui and Gallery in the 1970s; later from videos; and more recently from lad mags such as Maxim, FHM, and Stuff. Conservative nature of Americans in 1980s. Succession by Christie, Hefners daughter as CEO in 1988. As recently as 1999, its shares were trading at more than $30 before falling to less than $2 in early 2009 during the financial crisis.

Succession by Flanders as CEO in 2009. Significant losses in the company's value. Debt of about $115 million.

Watermark source http://typophile.com/files/playboy_logo_2598_3641.gif

Sources Scott Allen, former About.com Guide http://ezinearticles.com/?Playboy---Hugh-Hefners-Success-Story&id=479156 https://secure.wikimedia.org/wikipedia/en/wiki/Playboy https://secure.wikimedia.org/wikipedia/en/wiki/Hugh_Hefner