The Real Women of Playboy

Folio: The Magazine for Magazine Management, March 1, 2004

Byline: Susan Thea Posnock

Back in 1999, Playboy Enterprises hit the street for its second equity offering. But the company, whose tagline is "entertainment for men," didn't send out the guys in suits to talk to potential investors. Instead, the task was given to the team of CEO Christie Hefner, CFO Linda G. Havard, and senior vice president Martha Lindeman.

The reps for the underwriter, First Boston, were also women. Calling on mutual funds and other major investors, the phalanx of females was often greeted with a double take. "For them it was kind of fun and unexpected," Havard says. Lindeman, who heads up corporate communications, adds: "People found it ironic that we were from Playboy."

It has been 16 years since Christie Hefner replaced her father as head of Playboy Enterprises, making her one of the most high-profile female CEOs in the U.S. But the image of Playboy as a company that embodies the hedonistic ethos of Hugh Hefner still lingers; Christie's strategic moves in Chicago just don't create the kind of buzz that the pajama-clad founder generates from the company mansion in Holmby Hills.

Preserving that swingin' hound image may be good for business, but it has nothing to do with the way the business actually runs. "The prevailing misconception is that the majority of the women at the Playboy offices are dressed in bunny outfits," says Diane Stefani, executive vice president at public relations firm the Rosen Group and former director of public relations at Playboy. "During my six-year tenure at Playboy more than 60 percent of the organization's divisions were run by women," she says.

These are the real women of Playboy - women like Havard, who joined the company six-and-a-half years ago, after working as CFO at Atlantic Richfield Company (ARCO). "If you look at me, I'm the last person one would expect to work at Playboy," says the 48-year-old executive. "I'm a very conservative-looking, middle-aged woman. But I believe in what the company's values are." Whatever the message the magazine and its soft-core porn TV project about women may be, inside the organization, Playboy's culture and values are family- and female-friendly, she says.

Diversity (at least on the gender front) is not just window-dressing at Playboy. Nearly half of all employees are female: 28 percent of the executives and 44 percent of the managers are women. By comparison, about 16 percent of corporate officers at Fortune 500 companies are women, according to Catalyst, an organization that focuses on the advancement of female executives. In addition to Hefner, Havard and Lindeman, the top ranks include Carol A. Devine, senior vice president of human resources; Diane Silberstein, vice president and publisher of the magazine; Cleo Wilson, vice president of public affairs; and Danielle Barcilon, senior vice president and chief technology officer.

Many of these women have helped turn around the company's fortunes. Hefner et al took a traditional publishing company with revenues of about $215 million a decade ago and turned it into a multimedia entertainment business, with $315.8 million in revenues last year. Along the way, women were instrumental in steering Playboy through some perilous times. "When Christie took over the company, we were not really in the television business, we had profitable licensing but not what I'd call brand-friendly licensed products, and we were still in the club business, which was a low-margin, high-capital business," says Lindeman. "She moved us into higher-margin businesses, television and online, and she had a vision for the licensing business."

When Hefner became president in 1982, Playboy lost $52 million. In 1984, she sold off the company's casino holdings, consolidated divisions and sold or closed unprofitable ventures, including Playboy's nightclubs. She cleaned house at the licensing division, eliminating bunny-logoed air fresheners and beach towels, which, though profitable, were eroding the Playboy brand. Christie "was willing to risk shutting down the whole operation and starting all over again to protect the brand," says Lindeman. Christie and Helen Isaacson, the head of licensing, replaced the low-rent products with goods more closely linked to an upscale "aspirational" lifestyle, such as barware (martini glasses, corkscrews, etc.). Licensing revenues grew from $7.8 million in 1993 to $19.4 million in 2003.

Isaacson pushed female products like swimsuits and lingerie, which now account for 85 percent of all Playboy product purchases. Globally, 75 percent of licensed products are purchased by women and 25 percent by men.

Hefner and her team also hoisted Playboy's fare onto new platforms. Eileen Kent, former vice president of new media publishing, established Playboy as the first major consumer magazine on the Web in 1994. The operation grew quickly, but the revenues failed to keep up: The division lost $29.3 million in 2001 and $11.3 million in 2002, as consumer advertising on the Web dried up.

Hefner, however, fought outside experts and investors over retreating from the online commitment. "It was a couple of years of listening to people tell us we were idiots," says Lindeman. "I deal with investors all the time, and I had people tell me to get out of the business." The online venture finally turned a corner, becoming profitable at the end of 2002, and it brought in $38.8 million last year.