PLBY Group Stock

PLBY Group, Inc. operates as a pleasure and leisure company.

The company provides consumers around the world with products, content and experiences that help them lead happier, healthier and more fulfilling lives. The company’s flagship consumer brand, Playboy, is one of the most recognizable brands in the world, driving billions of dollars annually in global consumer spending with products and content available in approximately 180 countries.

Products

The company’s products and content connect consumers to a lifestyle of pleasure and leisure. Its offerings help consumers around the world look good, feel good, and enjoy their lives.

Sexual Wellness is a category that encompasses products, content and experiences that enable a state of physical, emotional, mental, and social sexual health and fulfillment. Offerings include products that enhance sexual experience, lingerie, bedroom accessories and intimacy products, as well as offerings that improve sexual health. As of December 31, 2022, the company’s sexual wellness offerings included lingerie, intimates and other adult products.

Style and Apparel includes a variety of apparel and accessories products for men and women globally, including one of the leading men’s apparel brands in China, and collaborations with fashion and streetwear brands, such as PacSun, Yves Saint Laurent and Lids available to consumers in the U.S. and the U.K. The company’s style and apparel offerings build on seven decades of standing for free expression.

Digital Entertainment and Lifestyle is a category that encompasses all the ways the company stands for sophisticated, fun and leisure-filled living. The company’s content creator platform on playboy.com lets customers interact directly with influencers and other creators that generate their own array of content. Playboy programming distributed through various websites and domestic and international TV providers offers on-demand entertainment. The company’s spirits joint venture, Playboy Spirits, offers premium spirits under the Rare Hare brand, while playboy.com sells a variety of home goods and personal accessories. Collaborations with strategic partners in the nightlife, hospitality, metaverse, and digital casino and online gaming industries allow the company’s customers to further experience the Playboy lifestyle in-person and from their electronic devices.

Beauty and Grooming builds on the company’s long role serving as a platform for beauty and the brand’s commercial success in the fragrance category. As of December 31, 2022, the company approached this category through the lens of confidence, providing its consumers with products and content that inspire body positivity and creative expression. With strong adjacency to Sexual Wellness, Beauty and Grooming offerings include men's and women’s skincare, haircare, bath and body, grooming, cosmetics and fragrance. These offerings are primarily delivered by the company’s strategic licensing partners, and some products are offered for resale on playboy.com.

Each of the foregoing categories represent very large and growing markets, providing the company with significant opportunities for growth from the increased sales of its products, as well as through the introduction of new products within these categories.

Segments

The company operates through three segments: Licensing, Direct-to-Consumer, and Digital Subscriptions and Content.

Licensing

Licensing, including licensing the company’s brand to third parties for products, services, venues, online gaming and events.

The company licenses the Playboy name, Rabbit Head Design, and other trademarks and related properties to partners around the world. The company’s licensing agreements permit licensees the right to use certain Playboy trademarks for certain categories of products in certain territories for a fee, which is typically a royalty calculated as a percentage of net revenue from wholesale and/or retail sales of such products, subject to an annual, bi-annual or quarterly minimum royalty payment.

Creative Artists Agency, a brand agency with significant global reach and infrastructure, acts as the company’s exclusive licensing agent for the Playboy brand trademarks and intellectual property for consumer products in a broad range of categories in most of the world. The company is entering into a joint venture, Playboy China Limited, with Charactopia Licensing Limited, a Fung Retailing brand management company, representing many global brands in China, to jointly own and operate the Playboy licensed business in China (including Hong Kong and Macau). The company expects the Playboy China joint venture to invigorate its China-market Playboy apparel business, including online and offline retail strategies, product design and assortment, and brand marketing to its multi-generational audience.

Direct-to-Consumer

Direct-to-Consumer, including sales of third-party products through the company’s owned-and-operated e-commerce platforms, and sales of its proprietary products through its platforms and/or third-party retailers.

The company’s owned digital commerce retail platforms include playboy.com, honeybirdette.com and Honey Birdette retail stores (as of August 9, 2021), yandy.com, and loversstores.com and Lovers retail stores (as of March 1, 2021). The company manages the inventory and shipping for its owned digital and retail commerce channels through a combination of its own warehouse and fulfillment centers and through third-party logistics centers, providing a flexible and scalable base from which to continue the expansion of its direct-to-consumer sales platform model. In addition to the company’s owned channels, it has actively expanded the third-party sales of its proprietary products across major retailers in Western markets.

Digital Subscriptions and Content

Digital Subscriptions and Content, including revenues generated from the sales of creator offerings to consumers on playboy.com, the sale of subscriptions to Playboy programming, which is distributed through various channels, including websites and domestic and international TV, and the sales of tokenized digital art and collectibles.

As of December 31, 2022, the company’s Digital Subscriptions and Content included its creator-led platform on playboy.com (initially launched in December 2021), non-fungible token (NFTs) art and collectibles offerings (initially launched in early 2021), and Playboy’s adult content offerings, including playboyplus.com and playboy.tv.

Playboy-branded digital content offerings reach more than 150,000 subscribers and users across Playboy-managed digital platforms. In addition, Playboy TV is offered through leading MSOs (multiple-system operators) around the globe, including the U.S. multiple system operators (MSOs) DIRECTV, Comcast, Dish, Charter, Cox, Altice, and Mediacom. Pursuant to its agreements with the MSOs, Playboy programs the Playboy TV and typically receives a royalty based on the numbers of subscribers to the service.

Strategy

The company builds up its direct-to-consumer business, including expanding its licensing categories, and developed its digital capabilities, including launching its creator platform.

The company will refocus its three key growth pillars: first, strategically expanding its licensing business in key categories and territories. The company’s Playboy China joint venture is expected to invigorate its China-market Playboy apparel business, building on Playboy’s roster of licensees and online storefronts by adding new licensees. The company will continue to use its licensing business as a marketing tool and brand builder, in particular through its high-end designer collaborations and its large-scale partnerships with partners, such as PacSun. Second, investing in its Playboy digital platform as it returns to its roots as a place to see and be seen for creators and up and coming cultural influencers. Third, building upon Honey Birdette’s existing high margin retail business by expanding the brand in the United States. The company’s content creator-led platform dedicated to creative freedom, artistic expression and sex positivity, is the cornerstone of its digital strategy.

Competition

The company operates in the consumer goods space across a variety of different industries and faces competition from broad direct-to-consumer platforms, such as Amazon, as well as brands and retailers that are more targeted to particular markets. In the men’s apparel space in China, the company competes with other leading men’s apparel brands, such as Uniqlo, Semir, Levi’s, Nautica and Lacoste. In the sexual wellness industry, the company competes with lingerie brands and e-commerce businesses, such as La Perla, Fleur du Mal, Victoria’s Secret and AdoreMe, and other suppliers of products in this fragmented and rapidly growing space, as well as with Sexual Wellness e-commerce platforms and brick and mortar retail chains, such as Lovehoney, Fashion Nova and Adam & Eve.

Intellectual Property

The company owns various trademarks, copyrights and software comprising its intellectual property holdings including, without limitation, the ‘Playboy’ name, the ‘RABBIT HEAD DESIGN’ logo, the ‘Yandy’ name, the ‘Lovers’ name and the ‘Honey Birdette’ name.

The company has active trademark registrations in more than 150 countries for its key trademarks, including variations of the PLAYBOY and the RABBIT HEAD DESIGN logo, which are typically the core intellectual property it licenses pursuant to its licensing agreements and use on its branded consumer products.

Government Regulation

The company is in material compliance with regulatory requirements applicable to its business. These regulatory requirements include, without limitation federal, state, local and foreign laws and regulations involving minimum wage, health care, overtime, sick leave, lunch and rest breaks and other similar wage, benefits and hour requirements and other similar laws; Title VII of the Civil Rights Act and the Americans with Disabilities Act and regulations of the U.S. Department of Labor, the Occupational Safety & Health Administration, the U.S. Equal Employment Opportunity Commission and the equivalent state agencies and other similar laws; alcohol beverage marketing regulations, custom and import matters with respect to products imported to and exported from the United States; the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and other similar anti-bribery and anti- kickback laws and regulations that generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business; and federal, state and foreign anticorruption, data protection, privacy, consumer protection, content regulation and other laws and regulations, including without limitation, the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).