Playboy is back in the nightclub business

"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."

MORE FROM U.S. BUSINESS

U.S. business Section Front

Where porn stars sing for their supper   Citi, Wells Fargo seek to replay TARP loans Rich getting richer? Particularly in Connecticut Industry slams EPA greenhouse gas ruling Obama to lay out plan to combat joblessness Hasbro to make Sesame Street-brand toys NYT: U.S. forecasts smaller loss from bank bailout Five AIG execs say may quit over pay: report AOL goes it alone in split with Time Warner Apple confirms purchase of music site Lala U.S. business Section Front   Add U.S. business headlines to your news reader: