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Playboy’s financial problems increase

It’s not easy being a world-famous playboy in the Great Recession. Just ask Hugh Hefner, the 83-year-old founder of Playboy magazine - which made its name in the fifties by publishing the short stories of Ian Fleming and Vladimir Nabokov in between glossy pictorials of lightly dressed and generously proportioned young women.

With Mr Hefner’s Playboy Enterprises media empire facing mounting losses and plunging revenues, the ageing publisher sold his ’English Manor’ in Los Angeles over the weekend for $18 million — a full $10 million less than the asking price. The property is located next door to the more famous Playboy Mansion in the super-wealthy Holmby Hills area of LA.

Mr Hefner, better known as ‘Hef’, originally bought the seven-bedroom manor with his wife and ex-Playboy Playmate, Kimberley, who is almost forty years his junior. Although the couple separated a decade ago, they never officially divorced.

It is thought that Mr Hefner decided to put the house on the market because his sons, Marston and Cooper, have now moved out to university.

Nevertheless, the $18 million he collected will also no doubt come in handy. Playboy Enterprises has seen its value plunge from almost $1 billion (£605 million) at the turn of the millennium to just $84 million today — resulting in the New York Stock Exchange threatening to ‘de-list’ its shares. Mr Hefner owns about 70 per cent of the company’s common stock, and is widely believed to have put the magazine-to-DVDs empire up for sale for about $300 million.

So far, no takers have emerged, although Sir Richard Branson has been mooted as a potential saviour.

Mr Hefner’s daughter, Christie, resigned in December last year as CEO of the beleaguered company, which was founded in 1953 when the debut issue of Playboy — featuring Marilyn Monroe on the cover — was cut and pasted together in its founder’s Chicago kitchen. It is now run by Scott Flanders, former head of Freedom Communications, which publishes newspapers including the Orange County Register.

But Playboy’s troubles are perhaps even more dramatic than those facing the US newspaper industry. Free YouTube-style video websites have destroyed the market for Playboy’s adult DVDs over the last couple of years, while in the magazine business, the recession has brought with it a collapse in advertising.

To save money, Playboy merged its July and August issues. Last week the full extent of the company’s financial crisis was made public when it reported a second-quarter loss of nearly $9 million, more than double the loss of $3.2 million for the same period the previous year. Revenues fell by 15 per cent.

As of yesterday, it was unclear where Kimberley Hefner would live after the sale of the English Manor, After separating from his wife, Mr Hefner moved full-time into the Playboy Mansion with his three blonde girlfriends, who starred in a reality TV show entitled The Girls Next Door. They have since left him, and Mr Hefer is now ’dating’ 19-year-old identical twin models, along with a new third girlfriend. To live in the Mansion, Mr Hefner pays rent of about $1.3 million a year to his company, according to annual reports.

As for the buyer of Mr Hefner’s English Manor, his identity has been revealed as Daren Metropoulos, a Beverly Hills entrepreneur. The recession, it seems, has been much kinder to Mr Metropoulos, the son of a wealthy investor. He apparently had no problem finding the $18 million needed to buy the property — even though he is only 25 years old.

 

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