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Playboy Enterprises Inc. is looking at $10 million more in cost cutting in the wake of declining sales. For the second quarter e-commerce revenue declined by 21.6%, while total sales dropped by 14.4%.
Playboy Enterprises Inc. is looking at more cost cutting in the wake of declining sales, including e-commerce.
For the second quarter ended June 30, e-commerce revenue for Playboy declined by 21.6% to $11.6 million from $14.8 million in the prior year. Overall, Playboy, No. 387 in the Internet Retailer Top 500 Guide, posted a net loss of $2.1 million on revenue of $73.4 million vs. net income of $1.9 million on sales of $85.7 million in the second quarter of the prior year. "Traditional media is facing a secular shift, and advertisers are migrating to new platforms,” says Playboy CEO Christie Hefner. “This has created a challenging environment for our print and TV businesses.”
For the first two quarters, e-commerce revenue for Playboy, which operates Playboystore.com and Shopthebunny.com, declined by 12.1% to $26.8 million from $30.5 million in the same period in 2007. Playboy also recorded a net loss of $5.2 million on total sales of $151.9 million vs. net income of $3.4 million on sales of $171.1 million in the prior year. "2008 has been and will remain a difficult year,” says Hefner. “Through the first half of this year, we have reduced expenses by nearly $5 million and we have further identified a total of approximately $10 million in annualized cost savings.”
Playboy took a $600,000 restructuring charge in the first quarter, which it attributed mainly to outsourcing its e-commerce operations to eFashionSolutions LLC.