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Penthouse CEO Guccione resigns

Penthouse founder Robert Guccione resigned Thursday as chief executive of the racy magazine’s parent company after a steep drop in circulation put the publication on the auction block.
/ Source: The Associated Press

Penthouse founder Robert Guccione resigned on Thursday as chief executive of the racy magazine’s parent company after a steep drop in circulation put the publication on the auction block.

GUCCIONE, THE 72-YEAR-OLD Brooklyn, New York native, started Penthouse in 1965 and ranks as one of the world’s famous publishers of adult magazines along with Playboy’s Hugh Hefner and Hustler’s Larry Flynt.

Penthouse has struggled with a sales declines as Internet pornography lured away its customers. The magazine, which once boasted a monthly circulation of about 5 million, sold just 530,000 copies last December, according to published reports.

Penthouse International, the company that owns the magazine and is controlled by Guccione, said the flamboyant founder had resigned as chairman and chief executive.

Guccione was known to stir up profitable controversies. Vanessa Williams was forced to give up her Miss America title in 1984 after sexually explicit pictures of her appeared in Penthouse. The issue was said to be the most successful ever for the magazine.

Now the job of running the corporation goes to Milton Polland, who was appointed chairman and acting CEO. Claude Bertin was named executive vice president, secretary and director, the company said in a statement late Thursday.

Reached at his Los Angeles home, Polland, 90, said he was approached for the job because Penthouse thought he could help generate new business. Polland said Penthouse has considered introducing hotels or spas, possibly in Mexico.

“I wouldn’t have accepted the post if I didn’t think this company would survive,” said Polland, a former economic adviser to the Republic of the Marshall Islands and chairman of the board of GenuTec, a communications company in California.

Penthouse did not immediately return calls for comment, and Polland said he did not know of the circumstances leading to Guccione’s resignation.

Polland said the CEO position for him was only a temporary one. “This is a job for a younger man,” he said, “but I think they can gain something from my expertise.”

General Media, the Penthouse International unit that publishes the magazine, filed for Chapter 11 bankruptcy protection in August, and put the magazine up for sale as part of an agreement with creditors last month.

It named T. Scott Avila, a partner in turnaround firm Corporate Revitalization Partners LLC, as chief restructuring officer.

Guccione owns 85 percent of both Penthouse International and General Media, a court filing shows.

Separately, Penthouse International said it issued 30 million restricted common shares and $115.5 million of convertible preferred stock to buy a 99.5 percent stake in Del Sol Investments LLC, an Arizona limited liability company that owns some Mexican oceanfront property.

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