(Filed Under wholesale Lingerie News). Playboy Enterprises, benefiting, in part, from its 2019 acquisition of Yandy.com, reported net income of $1.266 million on sales of $35.004 million in the three months ended September 30, compared to a loss of $3.361 million on sales of $18.782 million in the same three months last year.
Playboy, which is seeking to go public early next year, and which acquired Yandy at the very end of 2019, also reported a loss of $4.759 million on sales of $101.335 million for the first nine months of the year, compared to a loss of $17.558 million on sales of $56.871 million in the same period last year.
In October, Playboy announced it was planning to merge with a public company, Mountain Crest Acquisition Corp., a special purpose acquisition company, which had already raised about $58 million. Upon conclusion of the merger in early 2021, the combined entity plans to trade publicly under the ticker PLBY. And Playboy announced in early December it has already changed its own name from Playboy Group, Inc. to PLBY Group, Inc.
Referring to its sales gains in the first nine months, Playboy noted “this growth was primarily driven by Direct-to-Consumer revenue, which increased $40.0 million, and Licensing revenue, which increased $7.0 million, from the year ago period.”
In a transcript of comments that accompanied the SEC filings, Playboy CEO Ben Kohn acknowledged “direct-to-consumer sales in the sexual wellness category contributed to most of that rapid year over year growth,” adding “as we look ahead to 2021, we are encouraged by the strong traction in our digital commerce offerings, our pipeline of licensing deals and recently launched owned-and-operated products, and the recovery of some of our Covid-related losses in our gaming and apparel businesses that we anticipate will come back online as those supply chains normalize.”
In an interview with CNN on December 2, a transcript of which was included in the SEC filings, he detailed the income streams for the company. “We are a consumer product company and really a lifestyle consumer product company organized around four key categories: sexual wellness, which represent about $55 million of our revenue today, apparel and accessories or style and apparel which represents roughly $75 million dollars, gaming and lifestyle and beauty and grooming. And we monetize those four categories through three primary revenue streams. The first is direct to consumer, which is about $68 million dollars of our revenue, largely in the U. S., licensing or royalty revenue which is about $67 million and then we’ve just gotten our products, our sexual wellness products into third party big box retailers. Those products are in over 10,000 stores today.”
Recently we found hundreds of Playboy products listed on Walmart.com, including fragrances, apparel, costumes, and condoms. A single item was listed on Nordstrom.com: a “Monse x Playboy Merino Wool Sweater for $990.00.” Yandy.com, which until recently did not offer many Playboy items, had for sale 46 Playboy items in early December, including lingerie (some listed as exclusive), condoms and lubricants.
Playboy ceased publishing its magazine in February, 2020, and in the CNN interview Kohn explained “I think people had thought the magazine was the hero product. It wasn’t the hero product. This has not been the hero product for years. The hero product is really the brand and that’s what’s generating the $3 billion dollars of consumer spend.”
“And so, when you looked at the magazine and what it entailed internally, it added more confusion than anything else. It’s not where the business is today. We have consumer products that are available in over 180 countries and our goal going forward is to capture more of that $3 billion dollars of spend.”
In another interview with Cheddar TV, also included in the SEC filing, Kohn repeated a startling claim: “In China we are the leading men’s fashion brand, 2500 brick-and-mortar stores, over a thousand ecomm stores, that contributes about $75 million of revenue today.”
Interviewer Kristen Scholer questioned the statement. “China is of interest there. Really, Ben, the largest, fastest-growing male retailer for clothing in China, that’s true?”
Kohn replied, “well, we are the leading men’s apparel brand in China. So, 2500 brick-and-mortar stores, consumer spend in excess of a billion dollars buying Playboy products today in China. We’ve been there for 20 years, and there’s a lot more growth to be had in China.”
Scholer continued, “how did you make inroads into China? Is that a new growth opportunity and market for you, and what about the brand resonated there?”
Responded Kohn: “it’s really the Americana and the lifestyle component of it. The Chinese consumer has never seen what was the historical magazine of the company. The company entered China about 25 years ago licensing the brand for clothing. And it has really become a men’s lifestyle brand there. We are about to launch women’s product as well as men’s grooming products, and we think there’s a massive opportunity with color cosmetics for us as well.”
Recently Yandy.com began offering a number of “exclusive” Playboy lingerie items (ranging in price from $9.95 Playboy rabbit head pasties to $44.95 for a “provocative marabou robe”). Kohn seemed to reference the latest Yandy collection when he said to Scholer, “we just launched a lingerie collection on one of our commerce platforms that’s off to a phenomenal start. “We thought we had enough inventory to last us through Valentine’s Day, and you know, as of last Friday, we’ve already sold 50% of it. And we will most likely be out of inventory by the holidays.” — NM
The full Cheddar interview can be found here: https://cheddar.com/media/playboy-reports-earnings-for-first-time-since-returning-to-public-markets
The CNN interview can be found here: https://www.cnn.com/videos/business/2020/12/02/markets-now-full-show-12-02-2020-ahrens-kohn-azzarello.cnnbusiness
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