Hugh Hefner owns one of the most famous pieces of real estate in the world --the Playboy
Apparently not. Playboy plans on opening another one in Macao, China. Now, this isn't going to be a private home: It's a joint venture between the adult-oriented media company and Macao Studio City, which is an entertainment complex consisting of hotels, gaming outlets, studio facilities, and more. The project, dubbed Playboy Mansion Macao, will be 40,000 square feet in size and will feature all kinds of nightclub-type offerings -- as well as a Hugh M. Hefner villa, of course. There also will be elements included to make one think of the real Playboy Mansion, such as a pool and grotto. You'll be able to dine and shop in a decadent atmosphere that will put you in the most hedonistic of moods (or so I surmise). Look for it near the end of 2009.
These have been trying times for Playboy. The company has seen its once-famous flagship magazine product, Playboy, flounder. The publishing business has been a huge drag, and it certainly hasn't inspired confidence in many investors.
Yet there is still value to the brand, and Playboy is intent on licensing it and spreading it around the world. Creating entertainment destinations is a smart way to leverage the logo and the image of the lifestyle people conjure in their minds. Playboy obviously intends on expanding its global footprint in terms of hot spots that carry the iconic Bunny graphic. This past October, I wrote about the company's initiative of bringing back its old Playboy Club concept to Las Vegas. That venture is helping to drive revenue and profits in the licensing operations; according to the latest 10-Q filing, licensing revenue from last quarter was up 51% and operating income from licensing increased 77%.
Playboy has had success with promoting its brand in international territories, and I see this Macao destination as a good way of showing consumers that the company knows how to take its philosophy and translate it into a fun, entertaining social experience. It's pretty sad that the magazine can no longer be relied upon to fuel growth, but the company can look to other businesses such as location-based complexes to help expand the top line. Media concerns naturally gravitate toward an expanding model -- it's no different than Marvel
Macao should see excellent growth in its gambling industry over the next several years. This will increase tourism and bode well for Playboy Mansion Macao. If the site does gangbuster business, then Playboy will be justified in exploring more opportunities in this line of operations, especially since they will help to catalyze international merchandising opportunities.
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Fool contributor Steven Mallas owns shares of Disney and Marvel Entertainment. He thinks Playboy should build a mansion right next to his house. As of this writing, he was ranked 10,232 out of 31,278 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.