Sex Sells, But Not Even Playboy is Recession Proof

by CBS News

Published: Tue, May 12, 2009 - 12:29 pm CST

Radical changes are in the works for Chicago-based Playboy Magazine, after decades of declining readership and advertising.

Playboy says it is considering cutting circulation and reducing how often the magazine is published. Plans are already in place to combine the July and August interviews, according to the Chicago Tribune.

The magazine will soon get a makeover of its main publication which interim Chairman and Chief Executive Officer Jerome Kern said will bring the magazine a "younger and fresher look," the Tribune reported.

Playboy has already closed its New York office and consolidated its print and digital operations to save money. The total staff has been cut by more than 25 percent since last October, and executives have focused attention on the digital and licensing arms of the Playboy empire, according to a news release.

The company recently introduced a revamped free Playboy.com Web site, which the company says "creates a web experience that is more attractive to both consumers and advertisers." The club also plans to open its second entertainment venue by the end of the year, in a Latin American resort location. The only Playboy Club currently operating is in Las Vegas, and another location is planned in Macau.

But Playboy can't take its eyes off its namesake publication altogether, the news release said.

"The publishing business remains a key focus of our attention, as the print industry continues to face significant challenges on both the circulation and advertising fronts. Despite a first quarter that was weaker than last year, reflecting the negative impact of a change in how we record direct response advertising costs, we believe the magazine's bottom line will improve in 2009 versus last year. This performance is still not acceptable, however, and we expect to continue making changes that will lead to further improvements in the magazine's financial results," Kern said in the release.

Playboy was founded in Chicago in 1953 by Hugh Hefner, and its headquarters are located in the 680 N. Lake Shore Dr. building in the Streeterville neighborhood. The first Playboy Club was also in Chicago at 116 E. Walton St. It operated from 1960 to 1986.

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