Playboy, which has seen a string of quarterly losses, has faced a tough business environment and recently reduced annual costs by $12 million and shed about 80 positions companywide.
A decline in ad spending led the company to a $5.2 million loss in the third quarter. The company also recently said it would go out of the DVD business, as well as consolidate its West Coast offices.
Hefner will remain on the board until her replacement is found, the Chicago-based company said today in a statement.
Jerome Kern, who joined Playboy’s board of directors in 2002, will serve as interim non-executive chairman.
Kern, 71, has been a partner in Enki Strategic Advisors, consultants to the broadband industry, since 2007, and president of Kern Consulting since 2001. Prior to that, Kern was chairman and CEO of On Command Corp. Prior to his position at On Command, he served as vice chairman and a member of the board of directors of Tele-Communications Inc.
For more than 20 years, Kern was the principal outside legal counsel to TCI and Liberty Media Corporation, including from 1992 to 1998, when he served as senior partner of the law firm Baker & Botts.
Hefner joined Playboy in 1975 and rose to CEO in 1988, guiding the adult giant into television, video and the Internet.
In an appearance on CNBC today, Hefner said she “wouldn’t be able to step down if the company weren’t in such strong shape.”
“Playboy Enterprises Inc. has literally and figuratively been my life and career for more than 30 years,” Hefner said. “I have had a remarkable career with Playboy. I never expected to go into the family business, much less to stay here this long, but I have enjoyed the challenges and opportunities the past decades have presented."
Terms of Hefner’s and Kern’s compensation deals weren’t determined at press deadline. Playboy said it would disclose those arrangements in a later regulatory filing.