NEW YORK (Reuters) - Playboy Enterprises Inc, the adult entertainment magazine publisher facing eroding advertising sales and mounting competition from free Internet pornography, named a Southern California newspaper publisher as its new chief executive on Monday.
Scott Flanders, 52, will succeed interim Chief Executive Jerome Kern, Playboy said in a statement.
Flanders is chief executive of Freedom Communications, a television broadcaster and publisher of the Orange County Register, the primary local daily newspaper for the company’s hometown of Irvine, California, and the surrounding area.
He will join the company along with Olympus Media LLC Chief Financial Officer David Chemerow, who will become nonexecutive chairman.
Before his three years at Freedom Communications, Flanders was chief executive of Columbia House, which sells music and DVDs to people who sign up as members and commit to buy a minimum number of items per year.
Flanders is the first permanent CEO to be named after the resignation late last year of Christie Hefner, daughter of the magazine’s founder, Hugh Hefner. She left after two decades at the company.
The magazine — with its nude photo spreads of “Playboy Playmates” along with its “Bunny Ears” logo, videos and associated branded merchandise — has become an American icon since Hugh Hefner began publishing it in 1953.
Despite its well-known brand, the Chicago-based company has suffered financially as more people use the Internet to search for erotic images and video.
During the latter years of Christie Hefner’s tenure at the company, advertising revenue declines at many U.S. magazines and newspapers accelerated.
Playboy has expanded its licensing of its famous brand at nightclubs and on clothing and other accessories, but that business still has more potential, Flanders said.
“The brand punches above its weight,” he told Reuters in an interview. “I see huge potential for it.”
His appointment does little, however, to quell speculation that the company could soon leave the control of founder Hugh Hefner after more than 50 years.
Recent reports said that the company is interested in finding a buyer. The New York Post said it was shopping itself for about $300 million, about three times its market value.
Last week, British entrepreneur Richard Branson denied reports that his Virgin Group was interested in buying Playboy.
Flanders and a company official declined to say if Playboy is for sale.
“I came to Playboy to build long-term shareholder value,” Flanders said. “Having said that, a brand as iconic and global as Playboy will always command a lot of interest among different parties.”
Playboy shares have lost nearly half their value in the past 12 months. On Monday, they fell 10.81 percent to close at $2.97 on the New York Stock Exchange.
Reporting by Robert MacMillan; Editing by Richard Chang and Matthew Lewis