We all know what Playboy is.
In fact, try to imagine a time when you didn’t. Almost impossible, isn’t it? Whether you read the magazine or not, you grew up with an awareness of its existence. Perhaps you even had a subscription, or maybe you just picked up an issue every now and then to “read the articles.” To this day, Playboy continues to be globally ubiquitous. Unfortunately, ubiquity doesn’t always translate to prosperity.
Just how bad a situation Playboy found itself in as recently as 2008 might shock you. “The company was losing about a million dollars an issue,” says Scott Flanders, the man Hugh Hefner brought on board to take control of the business after daughter Christie Hefner stepped down as CEO in December 2008. To make matters worse, Playboy’s stock had reached a new low earlier that spring, trading at just under a dollar a share, and was at risk of being delisted from the New York Stock Exchange. To say Flanders had his work cut out for him would be a hilarious understatement.
Of course, Flanders didn’t fall into this role by accident. A 20-year veteran of the media industry with a resume listing a plethora of titles including president of Macmillan Publishing, chairman and CEO of Columbia House Company, and CEO of Freedom Communications, Flanders possessed the skill set and experience to hit the ground running—a consensus the Playboy search committee came to after a painstaking selection process that lasted six months and vetted more than 180 candidates. “The board expected me to deliver a wholesale turnaround strategy for the media business,” Flanders says. “Hef was very dissatisfied with the trajectory of the business when I came in—he made it very clear to me that it was my job to reverse that trend.”
Saving Playboy meant more than revamping its flagship magazine. Way more. Over the years, as the company adapted to meet the demands of a digital age—and an evolving consumer— it had expanded its brand to include TV, video, web, and radio properties, as well as a licensing business for consumer goods like apparel and cosmetics. But with a global workforce of just 585 employees, it had spread itself too thin and lacked the in-house expertise to dominate in all those markets simultaneously. “Playboy saw itself as a global media enterprise when in fact it was sub-scale in every one of those segments,” Flanders says.
In the time between Christie Hefner’s departure in 2008 and Flanders’ first day in July 2009, a grim notion had permeated Playboy’s board and led it to decide that the company needed to cut its losses immediately. The solution: scrap the magazine and sell the mansion—two of the brand’s most iconic assets, which together formed the very foundation of the empire.
Certain of this, Flanders—acknowledging that he’d been hired to do something drastic—acted accordingly, disregarding the board’s recommendation. “My first two decisions were that both the mansion and the magazine were critical to maintaining and driving the relevance of the brand in the future,” he says. “I realized that, while we needed to [stem] those losses, the magazine was still the cornerstone of the brand.” He viewed the mansion as being almost equally important to Playboy’s image. “I went to some of the parties and saw how valuable, how desired it is,” Flanders says. “We want to be a mainstream lifestyle brand that’s experienced through both print and digital content, but also through the experiences we deliver—and that includes parties at the mansion.”