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Playboy is back in the nightclub business

It was late 1985 when Hugh Hefner walked into the grand opening of Playboy's Empire Club in Manhattan, the latest attempt by the magazine company to freshen its suave, sexy image.
Lindsey Roeper will be a dealer in the new Playboy Club which opens in Oct. 6.
Lindsey Roeper will be a dealer in the new Playboy Club which opens in Oct. 6.Laura Rauch / AP
/ Source: The Associated Press

It was late 1985 when Hugh Hefner walked into the grand opening of Playboy's Empire Club in Manhattan, the latest attempt by the magazine company to freshen its suave, sexy image.

A quarter century of success in running such clubs was on the wane and a new gimmick was thought to be needed to attract a new audience of women — male bunnies.

"I thought, 'This is the end of it,'" Hefner recalls, chuckling. "And indeed, within a year or so, it was."

Now, two decades after rising feminism and a fading nightclub scene helped close the last U.S. Playboy Club in Lansing, Mich., in 1988, a new Playboy Club is set to open Oct. 6 in Las Vegas, just as fresh and retro-hip as a pair of bell-bottom jeans.

"Things that become old-fashioned in a certain time frame, in a new time frame take on a whole new kind of mystique," said Hefner, the 80-year-old founder and majority shareholder of Playboy Enterprises Inc. "That is exactly what happened to all things Playboy."

The original clubs, staffed by bustiered Bunnies and spurred by the sexual revolution, spanned the globe in their heyday in the 1960s and '70s, from Chicago and New York to Manila, London, Tokyo and the Bahamas. At their height, 22 clubs were in operation, employing more than 25,000 Bunnies and boasting more than a million "keyholders," or members.

But they ran into feminism on one side and easily accessible explicit adult content on the other.

The Margaret Thatcher government challenged and then revoked the club's casino license in the U.K. in 1981. It forced the closure of the London club, once the company's most profitable operation, and led to the inability of Playboy to obtain a gambling license for a hotel-casino in Atlantic City, N.J., shortly after.

"Once we lost the gaming, we were really not able to financially carry the rest of what we were doing," Hefner said.

The last overseas club closed in Manila in 1991.

Today, Hefner's original idea of providing a roadmap to urban life by urging men to appreciate food, music, high ideas — and beautiful women — has taken on a new cachet.

"If you look at the magazine even in the early days, there were features on decorating your apartment, cooking, buying nice clothes, buying wine," said James Beggan, associate professor of sociology at the University of Louisville. "I think that they've always been ahead of their time in advocating what later becomes known as the 'metrosexual identity.'

"Society has caught up with Playboy's view," he said.

The new club, on the top three floors of the Palms hotel-casino, pays homage to the past while introducing its swinging bachelor lifestyle to a new generation. Lounge seating is back, as are the famous Bunny outfits, complete with ears, bow tie and cufflinks, designed by Roberto Cavalli.

"Ninety-five percent of the people who are going to end up spending all the money here have never been to a Playboy Club," said George Maloof Jr., the bachelor casino magnate who runs the Maloof family's $915 million resort. "So it's not even like your dad, maybe it's your grandfather (who) went. We wanted to create something that did remind people of the Playboy Club, but had a fresh new look."

Most important to the $55 million club's profitability, however, is its casino license, marking the first time in a half century that a Nevada club will be allowed to charge customers a cover to access gambling tables.

Playboy expects to make $4 million a year in mostly guaranteed licensing fees thanks in large part to the slot machines and blackjack and roulette tables to be staffed by Bunnies.

Licensing, Playboy's fastest-growing and highest-margin business, took in $16 million in operating profit last year. The club will provide a "meaningful lift" to the bottom line, chief executive Christie Hefner said.

Plus, Sin City seemed a perfect fit.

"A town that's defining itself through an ad slogan that says, 'What Happens in Vegas, Stays in Vegas,' you could argue is a pretty good environment for a Playboy-branded product."

The company is looking to open Playboy Clubs in other destinations in which casino games take center stage, Hefner said, first in London and Macau, and then other locations in Europe, the Caribbean and Australia.

"Our view was not that we wanted to go back into having a chain of nightclubs," she said. "But in markets where the dominant business proposition is casino gaming, you can complement that with a great club and lounge and entertainment and food and beverage and merchandising and make a great deal of money."

Analysts said the opening comes at a perfect time for the company, whose revenues from video products took a stutter step in the first half of the year as cable companies switched to video-on-demand technology and magazine advertising revenue continued to decline.

Magazine circulation is around 3 million, down from its peak of 7.2 million in 1972, and the print version is losing money because of high paper and postage costs despite being America's top-selling men's magazine and having 21 foreign editions. In the second quarter, Playboy Enterprises lost $2 million, eking out a tiny $393,000 profit in the first half.

"As far as the club itself, the fact that they're returning to that, we think that's a good thing," UBS Securities analyst Lucas Binder said. "It's an aspirational brand, where people aspire to be involved, and Las Vegas is a place that you know you can be part of something without having to go to the (Playboy) Mansion."