Built to last
Hefner spent seven years in a variety of roles before, in 1982, assertively seeking the vacant position of president after her father was forced, because of a regulatory dispute, to divest the company’s single largest profit center, its United Kingdom casinos.
"I felt (an outside search) would take a fair amount of time," she says. "The person coming in would have to take time to understand the businesses and the organization and develop plans to move forward and rally the troops to move forward.
"We didn’t have the time to do that. I felt we could get started right away making the changes that needed to be made in terms of divesting the company of the businesses that weren’t profitable and cutting back on costs and trying to refocus."
The board and her father agreed, naming Hefner president, while her father retained the titles chairman and CEO.
She quickly realized the loss of the casinos only added to the company’s troubles, which were much larger than she had thought.
"The biggest challenge was that the company was losing a lot of money," Hefner says. "The single biggest profit centers were the casinos in the U.K., and because of a regulatory dispute, it sold those businesses shortly before I became president. It went overnight from being profitable to reporting a loss of $50 million. Given the capital base of the company, we didn’t have a lot of time to turn it around.
"I never really stopped to think about the magnitude of the challenges. I just focused on what I thought we needed to do, get as much done every day and every week as we could, and kept my focus on cash, not on earnings or the stock price, which is one of the luxuries we have as a family-controlled company."
Hefner started by restructuring operations and stripping away unproductive parts of the business.
"The turnaround was really a function of being able to shed those businesses that weren’t successful — like the clubs, the record business or the book publishing business," she says. "We focused to make sure the magazine retained its leadership in the men’s market and then looked for opportunities for growth."
That led to the only disagreement Hefner ever had about business with her father.
"I was president, not CEO," she says, "and felt since we had sold the hotels and resorts, it was a good time to get out the club business. My father noted there were still half a million people paying us for their Playboy Club key cards every year. How did we know it couldn’t be successful if we didn’t try and update the business?
"It was impossible to answer without trying, so, in effect, we did. We opened a newer club in New York City, which was in many ways very successful in the sense that it was a neat place and attracted a nice crowd. But it also reinforced the basic problem, which is it is very hard to make money in the club business, especially when the heyday of all night clubs came at time when you could afford for those small venues great live entertainment, which you really can’t do anymore. To his credit, when the results came in after the first year, he said, ‘You’re right. Let’s move on.’ And we went through the process of closing down the clubs."
The incident highlights the difference between Christie Hefner and the iconic "Hef."
"In terms of differences between my father and me, I think the principle one is that his real focus and genius has always been on the creative and promotional side of it, whereas I’ve always enjoyed and focused more on the strategic and management side of the business," she says.
As founder and editor-in-chief, Hugh Hefner still decides the next Playmate of the Month, but it’s Christie Hefner who decides where Playboy Enterprises will be next month and next year.
One of those decisions helped lead the company onto the small screen with Playboy TV and the purchase of the Spice Channel. Playboy’s channels are available in approximately 130 million U.S. households, and its programming reaches more than 70 countries.
And more than a decade ago, Hefner made Playboy the first national magazine with a presence on the Web with its Playboy.com venture. The site is comprised of original content, as well as repurposed content from the magazine and television. Under Hefner, Playboy.com has become a multiple revenue business with subscription sites, e-commerce, advertising and online gaming. It has grown into one of the most popular online destinations for men and is the company’s fastest-growing profit center.
"Clearly one of the reasons we’ve been successful is that we’ve positioned ourselves as a content creator with strong brands and we’re agnostic with regard to making bets on technology," Hefner says. "A lot of our growth has come from new technologies, whether it’s digital homes in the television arena — which is now being further expanded because of the embracing of video-on-demand and subscription video-on-demand as a technology to deliver content to consumers — or whether it’s the growth of accessing of content via broadband online or the growth in wireless."
