CHICAGO, IL — Times are tough all over and the Bunny is feeling them as much as anyone else — or possibly more. Due to tightening fiscal realities, softcore porn pioneer Playboy Enterprises, Inc. recently announced that it would begin downsizing and cutting costs.Started in 1953 by Hugh Hefner in a Chicago apartment, the company has had to contend with decreased newsstand revenue and lagging advertising. In May, the company admitted that full-year earnings would fall below Wall Street predictions.
Although excited about the addition of ClubJenna content along with its Spice television, Sirius Satellite, and famous namesake full-color monthly, executives have made the difficult decision to tighten their discretionary expense belts, as well as slice $4.5 million from the Playboy Enterprises programming and editorial budgets. Additionally, it will also remove 30 positions from the company roster. On the plus side, about half of those jobs are currently unfilled.
Playboy shares closed up 22 cents (2.3-percent) on the New York Stock Exchange, at $9.77 per share recently, but the company anticipates a second-quarter loss of 10 to 13 cents per share, in addition to a six-cent restructuring charge. A Thompson Financial poll indicates that analysts foresee a seven-cent loss per share. During the past 52 weeks, Playboy share prices have ranged between $8.90 and $15.88, with shares falling 30-percent since the beginning of the year. Full second-quarter results are expected to be reported during the week of August 7th.
