Playboy Enterprises Inc. reported first quarter web sales of $15.2 million, down 3% from $15.7 million in Q1 2007. The company recorded a net loss for the first quarter ended March 31, 2008, of $3.1 million vs. $1.5 million in income the prior year. Overall revenue was $78.5 million in Q1 2008 compared with $85.4 million in the previous year`s quarter.
The web made up 19% of Playboy’s sales in Q1 2008 and about 18% in the same period of 2007. But the company is increasing its commitment to e-commerce as its customers continue casting about for a preferred buying channel, the company says.
Playboy took a $600,000 restructuring charge in Q1 of 2008, which it attributed mainly to outsourcing its e-commerce operations to eFashionSolutions LLC in March. EFashionSolutions is handling e-commerce for the company’s retail brands ShoptheBunny.com and PlayboyStore.com.
“Our publishing and domestic entertainment businesses continue to face unprecedented change in the way consumers access and use media content,” says Playboy chairman and CEO Christie Hefner. “We believe we are making good strategic progress in streamlining our operations and improving the future performance prospects of these businesses through steps like the recently completed sale of the assets of our Andrita television studio, the outsourcing of our e-commerce business, and reductions in overhead as well as print manufacturing and editorial expense.”
Cost-cutting is a near-term task, but the company’s longer range plan is to extend Playboy’s brands over a variety of platforms, Hefner says. “On the media side, our focus is on redesigning and upgrading the Playboy.com site to accelerate growth of that business, expanding our total audience and creating a better portal to our other properties. This will be a transitional year, as we are still in the investment stage of the retooling process and results won’t be apparent until year-end at the earliest.”
With the exception of international TV revenue, sales were down across the adult entertainment, fashion and accessories company’s three business segments-publishing, entertainment and licensing.
E-commerce is part of the company’s entertainment business segment, which recorded a 6% decline in sales to $47.9 million. First quarter 2008 entertainment segment income fell 37% from $4.3 million in the prior year period to $2.7 million.
Playboy is No. 387 in the Internet Retailer Top 500 Guide.