Hugh Hefner’s son offers to buy Playboy brand for $100 million

Cooper Hefner submitted an offer Monday along with a group of investors to buy the Playboy brand from Playboy Group for $100 million, according to Hefner and a deal proposal viewed by The Wall Street Journal.

Playboy Group, officially PLBY Group, also includes a social-media app and a lingerie manufacturer. It had a market value of just over $50 million as of Friday. The company went public through a special-purpose acquisition company when such vehicles were all the rage in 2021 but has seen its shares fall over 90% since then.

“It’s a great American company and a great American brand, outside of my personal connection to it," Hefner, 33, said in an interview. But it “has been managed to a state of potentially nonexistence."

Hefner is aiming to buy the Playboy brand and intellectual property and run the publication privately through his investment firm, Hefner Capital. The remaining parts of Playboy Group would continue as a separate company under a new name under his proposal. The remaining company would also receive a 10% equity stake in the reimagined Playboy.

Hefner said in addition to his own money, other investors include a hedge fund and one of Playboy’s former licensing partners. Hefner would run the new Playboy and become its CEO.

Playboy board chairman Suhail Rizvi and representatives for the company didn’t immediately respond to requests for comment.

Hefner was Playboy’s chief creative officer for three years, until 2019. Should his bid be successful, he said he has identified new licensing opportunities and media partnerships, such as documentaries, that could increase revenue and make the brand more relevant again.

“You could have all the money in the world and it would be difficult to build the type of brand recognition that Playboy has," he said.

Hugh Hefner died in 2017, leaving behind three other children in addition to Cooper. The company stopped publishing a regular print magazine in 2020. Cooper Hefner and the rest of the family have since sold their remaining stakes.

From $2 billion to around $50 million

Playboy as it exists today doesn’t look much like the publication the elder Hefner founded in 1953. Back then, it was targeted at a sophisticated male audience, and was known almost as well for its in-depth journalism by famous authors as it was for its nude images. Over the years, it moved into video production, merchandise sales and at one point had a limousine service. The company went public in 1971 and reached a peak market cap of $671 million in 1999.

Since then, however, the company has suffered steady declines. Like the rest of the magazine industry, it lost advertising revenue, and struggled to find its place in an era of proliferating online pornography.

By 2011, the magazine was losing around $1 million an issue. That year, Hugh Hefner worked with the private-equity firm Rizvi Traverse Management LLC to take the company private, in a deal that valued the company at $207 million.

In 2021, Playboy went public via a special acquisition company and its market value spiked within a few months to more than $2 billion. Its market value had shrunk to around $53 million through Friday and its shares were down more than 99% since their peak, trading for less than $1 apiece.

The company has focused more on licensing the logo and selling lingerie and other merchandise. In 2021, it purchased Australian-based lingerie manufacturer Honey Birdette for more than $330 million. Later that year, it acquired the content creator platform Dream for $30 million and folded it into a service called Centerfold, which is meant to compete with the adult-oriented social-media platform OnlyFans.

Playboy has been losing money and has more than $200 million in debt. It has been divesting some retail assets and cutting costs and negotiated a deal with creditors to allow it more time to pay down some of its debt.

Hefner said Playboy’s acquisitions were ill-advised and have been poorly managed.

“It’s Playboy entering businesses that they’ve never operated before," he said, and the products are “not resonating at all with consumers or customers or fans. And the business’s decline and the brand’s relevance—in terms of being hardly spoken about today—is a direct reflection of that."

Write to Ryan Knutson at ryan.knutson@wsj.com