Playboy Enterprises is counting on its new licensing cosmetics business to off-set lackluster magazine sales. Little bunny-eared tubes of makeup, sporting names like "Tie Me to the Bedpost" and "In the Mood," will be available at upscale retailers.
"The bulls on the stock have been emphasizing the licensing business as opposed to the core publishing business," said stock analyst David Miller, and he says that investors "hate the publishing business because it's a drag."
Playboy's publishing business generated 32 percent of sales but has been losing money for the last three quarters. Licensing accounted for just 8.2 percent of sales, but 26.7 percent of the company's operating profit during the same time period.