Playboy in sales talks with Iconix, sources say

Playboy Enterprises Inc., the men's magazine publisher, is in talks to sell itself to Iconix Brand Group Inc., according to two people close to the situation. Playboy's stock jumped 42 percent.

Iconix, the owner of the Candie's and London Fog clothing brands, has looked at Chicago-based Playboy's finances, said one of the people, who declined to be identified. The discussions may not lead to a transaction, the person said.

Playboy's market value had dropped to about $100 million before today as circulation plunged at the namesake magazine Hugh Hefner started in December 1953 with photos of Marilyn Monroe. Iconix Chairman and Chief Executive Officer Neil Cole is looking for acquisitions to add more brands that the New York-based company can license to retailers and manufacturers.

"Neil Cole has done a phenomenal job of taking some of these lost brands and developing them into something," said Gilbert Harrison, chairman and CEO of Financo Inc., a New York- based adviser. "Certainly Playboy would fit that mold."

Playboy's management has been looking for a buyer since Scott Flanders was appointed as CEO in June, one person close to the situation said. Flanders, the former CEO of Freedom Communications Inc., replaced Christie Hefner, who had run Playboy since 1988 and is the daughter of Hugh Hefner.

Playboy shares rose $1.21 to $4.07 Thursday. Iconix declined 39 cents, or 3.2 percent, to $11.76, giving the company a market value of about $840 million.

Bloomberg News