It's wabbit season!
There's only good news for Playboy (PLA) when someone expresses an interest in buying it. Shares of the ailing men's lifestyle company shot higher on Thursday when word got out that Iconix is interested in acquiring it. Iconix owns and licenses brands to manufacturers and counts Candie's and London Fog among its holdings. A deal isn't a sure thing, but Playboy now has something it hasn't in a while: hope.
Iconix has been looking to acquire more brands. And Playboy has been looking for a knight in shining armor (and with a hefty war chest in tow) since at least June, when Scott Flanders took the helm. But it looked like acquisition bait well before then, thanks to a rough financial situation.
Playboy is suffering at the hands of both the global recession and the media recession. The magazine's circulation dropped 9% to 2.45 million for the first half of 2009, and ad revenue fell 44% to $9.45 million. But there's more to Playboy (and its problems) than the magazine.
The company has made some imprudent decisions over the past decade, including a flawed entry into the hardcore porn space (via its acquisition of Club Jenna from performer Jenna Jameson) just as adult entertainment was finding its peak. Porn began to decline in 2006 and hasn't recovered since.
So, whether you call Playboy an adult entertainment brand, a media company or a lifestyle icon, it's clear that it needs a buyer. Iconix, it seems, is equipped to make the most of Playboy's tradition and image, which is all that's really left of the Hugh Hefner dream.
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