Playboy's bunny turns more alluring than its playmates

BANGALORE Fri Nov 20, 2009 8:25am EST

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BANGALORE (Reuters) - Playboy spent 56 years making sure that the world would know it by the sign of its bunny ears. Now that the company is up for sale, Playboy's iconic logo, not the magazine, might be what saves it.

Playboy Enterprises Inc PLA.N is in talks with at least one possible bidder for the Chicago-based company.

Fashion house Iconix Brand Group (ICON.O) may be more interested in the company's saucy symbol than the photo spreads of naked women that made the magazine famous in the first place.

Iconix wants the bunny ears brand, but wants a partner from the publishing world to buy the magazine and other content, a source familiar with the talks previously told Reuters.

The idea makes sense. Playboy magazine, with its double-header lineup of nude models and celebrity interviews, has long been in decline. Advertising revenue and circulation are falling, and readers get both attractions elsewhere, particularly for free on the Internet.

At the same time, the bunny ears brand hearkens back to an era when Playboy was widely read and epitomized the idea of the urbane sophisticate who appreciates the finer things that the swinging bachelor lifestyle promises.

In pop culture, that means photo spreads of celebrities such as Drew Barrymore, as well as memorable interviews including the one in which former U.S. President Jimmy Carter famously said "I've committed adultery in my heart many times."

That brand image, properly deployed, promises lots of cash to the right buyer, several analysts and experts said.

"They have definitely not ruined (the brand). It's just that it has to be brought back toward the image it once had," said Kelly O'Keefe, a branding specialist at Virginia Commonwealth University.

"There is more to this brand than just sex," he said. "There is sophistication, there is lifestyle, and there is freedom. And they haven't really done what they might to take advantage of that."

Iconix, which owns and licenses clothing brands such as Candies, Joe Boxer and Rocawear, is known for successfully exploiting valuable brands that it picks up from often troubled companies.

"Knowing Neil (Cole, CEO of Iconix Brands), they are going to put a game plan together, find some retail partners, give the Playboy brand a direction, and bring it back to life," said Marshal Cohen, chief industry analyst at the NPD Group.

"This is a brand that has had licensees from every single possible realm of product without any control or any real long-term plan," Cohen said.

Gradient Analytics analyst Nick Gibbons said $33 million might be the right price for the brand. It "doesn't sound astronomical, and would be within Iconix's reach," Gibbons said.

BUNNIES AND BRANDS

But what will happen to Playboy magazine?

For its January/February '10 issue, Playboy lowered its rate base -- the circulation guaranteed to advertisers -- to 1.5 million from 2.6 million, according to its latest quarterly report filed with the U.S. Securities and Exchange Commission.

That's a big drop for the publication that claimed circulation of over 7 million in 1972, and helped shape society's opinions on nudity, sex and free speech even as it enraged many who accused it of objectivizing women by encouraging boorish men to slaver over their bodies.

The problem? What was controversial then is often considered tame now.

Its representatives bristle when reporters and others include the name Playboy along with harder-edged titles like "Hustler" and "Penthouse," or term it pornography, but such competition and easily accessible Internet content have made the magazine much less desired by younger readers.

The search for friendlier terms with a wider audience than furtive adult entertainment viewers leaves it struggling to find a niche.

"Lad mags" like Maxim that feature similar photo shoots, with a little bit more fabric covering the models' bodies have also taken many customers away.

That and the passage of more than half a century might boomerang on the bunny ears, despite the promise they hold.

The logo is "past the mid-point of its life cycle," said Gibbons of Gradient.

"What clients are Iconix going to push the license through to? I wouldn't see the big-box retailers like Wal-Mart (WMT.N) or Target (TGT.N) being too keen to stock Playboy merchandise."

(Editing by Robert MacMillan and Anthony Kurian)

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