Playboy fourth-quarter loss shrinks on cost cutting

Playboy Enterprises Inc. said its fourth-quarter loss shrank as its namesake magazine swung to a profit after combining issues.

The net loss was $27.8 million, or 83 cents a share, the Chicago-based company said today in a statement, and included $28.6 million for expenses such as job cuts. A year earlier, Playboy posted a loss of $146.8 million, or $4.40 a share, including $157.2 million in impairment and other charges.

Playboy has seen circulation plunge at the magazine founded by Hugh Hefner in 1953 amid shrinking advertising revenue and Internet competition. Since arriving in June, Chief Executive Officer Scott Flanders has outsourced non-editorial functions such as the magazine's production and marketing, and named a new licensing head, a chief content officer and an interim chief financial officer.

The company said it combined its January and February issues of Playboy magazine to reduce costs and saw strong demand for a November 2009 issue featuring cartoon character Marge Simpson on the cover.

Playboy rose 1 cent to $3.39 at 10:11 a.m. in New York Stock Exchange composite trading. The shares gained 48 percent last year.

Iconix Brand Group Inc., based in New York, in December decided to halt acquisition discussions with the company after determining it would be too complicated to divest, shut down or find partners for Playboy units it didn't want to operate, according to two people familiar with the matter.

Shareholder SuitDavid Brown, an investor, sued Hefner last week in state court in Los Angeles, saying Hefner scuttled potential acquisition deals during the past six months so he could maintain his lifestyle. Brown is seeking class-action status for the complaint.Playboy said today it signed an exclusive agreement in Asia with IMG Licensing Worldwide to expand licensing of apparel, accessories and other products.Average circulation for Playboy magazine in the six months through December fell 23 percent to 2,021,751 from 2,617,116 in the year-earlier period, according to the Audit Bureau of Circulations. That compares with a 2.2 percent decline industrywide.