DIVESTITURES

Sep 01, 2000 9:30 PM  By

Playboy sells last catalog Critics’ Choice Video bought by fulfillment start-up After agreeing to sell its Collectors’ Choice Music catalog in June, Playboy Enterprises in August announced it would sell its Critics’ Choice Video catalog and Website to Naperville, IL-based start-up fulfillment firm Infinity Resources.

The deal is scheduled to close by the end of September; no purchase price was released. Although the adult-entertainment conglomerate won’t break out Critics’ Choice’s sales, the Playboy unit that included Critics’ Choice, Collectors’ Choice, and (for the first half of fiscal 1999) the Playboy and Spice online services, posted ’99 sales of $60.3 million.

Once the deal goes through, Infinity plans to hire Critics’ Choice Video chief operating officer Bob Terry to run the operation. Most of the other 150 Critics’ Choice employees will likely be hired as well, says Infinity CEO Dennis Abboud. Infinity will assume Playboy’s lease on its Itasca, IL-based Critics’ Choice fulfillment center and call center. Abboud says Infinity will set up the catalog’s headquarters at the fulfillment center and plans to look for dot-com companies to acquire.

Focus on the Playboy brand After Playboy’s continued weak performance of its catalog unit, last fall the $347.8 million company shifted its Playboy and Spice adult-entertainment products catalogs onto the Web. Then in February, the company put its Critics’ Choice Video and Collectors’ Choice Music catalogs, which it bought in October 1987, on the block. Playboy agreed in June to sell Collectors’ Choice to Soundies, a Chicago-based music marketer.

The catalogs “were the only [units] that weren’t branded businesses of ours,” says Playboy spokeswoman Angela DePaul. “The further we moved ahead with our branded businesses, the more we realized these weren’t strategic fits.”

The decision to exit the catalog arena hasn’t helped Playboy’s stock. The price per share has dropped from $29 in January to $13 in early August. The company had hoped that its planned $50 million initial public offering of its Playboy.com unit would lead the company toward greater overall growth. But when Wall Street began cooling to dot-coms earlier this year, Playboy shelved the IPO.

…with Jonah Gitlitz Jonah Gitlitz is the former president and a current board member of Rye, NY-based gifts and home goods cataloger Lillian Vernon Corp.; he was also president/CEO of the Direct Marketing Association.

Where are you from? New York.

What college did you attend?

American University, Washington, DC.

What was your first job out of college?

Reporter for Broadcasting and Cable magazine, covering the FTC, the FCC, and Congress.

Other than, perhaps, your current job, what would your dream job be?

Publisher of The Washington Post or The New York Times.

What was the biggest risk you ever took in your career?

Taking a job with the DMA. I was giving up a challenging and fulfilling position as executive vice president of the American Advertising Federation, a career that lasted 12 years. While I was ready for a change, I knew little about direct marketing.

What’s the best book you ever read? All the President’s Men.

The worst movie you ever saw? Natural Born Killers.

Your secret obsession?

Running. If I don’t get out there five mornings a week, I’ll come apart.

If you could trade places with someone for a day, who would you be?

President of the U.S.

What’s your biggest worry in life?

Will the air shuttles between New York and Washington (where I live) leave and arrive on time? Or, how long will the delay be this time?

Favorite musical artist? Cole Porter.

What is your favorite song? “Embraceable you.”

What is your favorite food? Chicken quesadilla.

What food do you most hate? Raw cuttlefish.

What kind of car do you drive? Mountain bike.

How do you take your coffee? Black.

Window or aisle seat? Aisle.

Are you a dog person or a cat person?

I prefer people. They have the capacity to clean up their own messes, with some exceptions.