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      Playboy has another tough quarter

      November 9, 2010 /

      Playboy has reported another quarterly loss, making things tough for Hugh Hefner in his bid to keep control of the company. He’s currently in a battle as the company is being pursued by well-funded buyers.

      The latest figures come as the company’s future ownership remains in doubt. FriendFinder Networks, owner of Playboy rival Penthouse magazine and adult websites, wants to buy the company for $210 million. It raised $551 million in debt at the end of last month, a move that could give it the cash to follow through on the bid.

      But Hefner, who owns 70% of the company’s voting stock, says he has no interest in selling. And he has proposed to the company’s board that he buy out the remaining stake in a deal that would value Playboy at about $185 million. A special committee of the company’s directors is considering the offer.

      In the meantime, Playboy’s management is trying to transform the company from a publishing and TV business into a “brand management” company, leaning more on revenue from licensing out the Playboy name and bunny ears for a range of products.

      FriendFinder seems serious here with all that cash. It will be interesting to see what other properties they pursue in this space.

      Advertising, General Business

      Luxury sales are rebounding

      October 18, 2010 /

      Here’s some interesting news regarding the retail sector and the luxury goods market. Luxury sales are rebounding, which probably means consumer sentiment is ticking back up.

      The luxury sector is rebounding better-than-expected this year thanks in large part to wealthy Americans replenishing their wardrobes after a year of self-denial and nouveau riche Chinese indulging in a worldwide spending spree, according to a new study released Monday.

      Sales of designer clothes, fine leather goods, jewelry, watches and other indulgences around the globe is forecast to surge 10 percent to euro168 billion ($236.7 billion) in 2010, recovering from a disastrous 2009 when sales declined 8 percent to euro153 billion, Bain & Co. said in its annual review of the sector commissioned by Italy’s Fondazione Altagamma association of high-end producers.

      Let’s see what happens this holiday season. If double-dip recession concerns are fading away, retailers might be in for a pleasant surprise.

      Economy, General Business, Retail

      “Opulence, I has it”

      October 12, 2010 /

      The new commercial from Direct TV is one of the funniest we’ve seen in years. The Russian oligarch is hilarious, and his opening line – “Opulence, I has it” – is becoming a new catch-phrase.

      SPORTSbyBROOKS tracked down the creators of the spot, Jon Kallus and Luis Romero, and asked them about how the whole thing came together. Learn how they thought of having dogs playing poker and how they staged the scene with the miniature giraffe.

      Advertising, Marketing, Media

      Greenspan supports raising taxes

      September 16, 2010 /

      The tax debate is raging on Capital Hill, and now we have this surprise from Alan Greenspan.

      Former Federal Reserve chief Alan Greenspan, reversing a long-standing aversion to higher taxes, said Wednesday tax rates must rise and the fiscal stimulus wound down in order to reduce the U.S. budget deficit and allow private investment to expand.

      “I am in favor for the first time in my memory of raising taxes,” Greenspan told an audience at the Council on Foreign Relations in New York. He said the economy could not recover while the high deficit remains high.

      Greenspan warned that the deficit, swollen by massive stimulus spending, was crowding out capital investment. We “must find a way to simmer down fiscal activism and allow the economy to heal,” he said, adding that stimulus spending had been far less successful than anticipated.

      Conservatives won’t be happy to hear this, but the reality of the long-term deficit needs serious solutions. Greenspan is stating the obvious.

      Economy

      Junk bond sales are booming

      September 7, 2010 /

      Here’s an interesting twist in the new reality:

      With rising fears of a prolonged recession and stomach-churning moves in the stock market, corporate bond markets have performed so well this year they look like they’re part of a parallel universe.

      Banks are reluctant to lend, but large corporations with the weakest credit ratings have had little trouble finding investors happy to hand over their cash.

      Companies sold $24.6 billion in junk bonds in August, the eighth-best month ever for sales, according to Thomson Reuters data. Among those feeding in the market: Goodyear Tire & Rubber Co., Rite Aid Corp. and acquisitive power giant NRG Energy Inc.

      So how is it that companies with bad credit find it so easy to borrow in this economy?

      “A lot of that has to do with living in a world where investments pay less than 1 percent,” said Diane Vazza, head of fixed income research at rating agency Standard & Poor’s.

      More and more companies are refinancing their corporate debt, getting rid of high-interest bonds in favor of a lower interest rate. In many ways this trend is a positive as companies lower their debt costs, having the exact effect that the Fed intended.

      Economy, Finance, General Business

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