Playboy (NYSE: PLA) is in discussions with Iconix Brand Group to sell itself, Bloomberg News reports, citing unnamed sources. The report is short on details but says that Iconix — which owns brands including London Fog and Starter — has looked at Playboy’s books. Considering that almost all of Iconix’s holdings are in apparel, it would appear that is where Iconix believes most of the value in Playboy lies; although Playboy is famous for its pictures of people shedding their clothes, it has a big business in licensing its brand to consumer companies, including clothing makers.
Playboy has said since February that it would be open to offers for a buyout. The company had reportedly reached out to several PE firms, although they balked at the company’s $300 million asking price. At one point, Virgin Group was also said to have been interested, although it later denied those reports. Playboy is not commenting on Iconix’s possible interest.
While Playboy CEO Scott Flanders has said that the company’s iconic magazine will remain its “flagship,” he has also said that a big goal is to “accelerate the growth” of the company’s licensing business, which currently accounts for the vast majority of its profits.
On that front, Iconix could be a good fit. The company says it licenses its brands to retailers and manufacturers “that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and around the world.” Last month, it paid $109 million for a majority stake in Ecko brands — a deal which it said was “consistent with our strategy to opportunistically acquire leading consumer brands that offer long-term growth potential.”
The firm was also in the news in October after it paid a $250,000 fine to the FTC for collecting personal information from children on some of its websites without asking their parents permission first.
A big question mark, of course, would be what would happen with Playboy’s digital, print, and entertainment businesses, if Iconix did in fact acquire the company.