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The Girl Next Door

Christie Hefner, the CEO of Playboy Enterprises-the magazine, television, internet, and casino empire-on defending a brand that's under siege, getting into politics, and why she'll never wear the Playboy bunny.

Just before and after Christie Hefner stepped down as chief executive of Playboy Enterprises on January 30, the company disclosed some information that helped to put her departure in context.

In Hefner's last week on the job, the company announced that Playboy magazine was shutting its New York office, moving back to Chicago, and replacing editorial director Chris Napolitano. The magazine has been losing circulation for years.

Then, on February 18, Playboy Enterprises posted a loss of $145.7 million for the fourth-quarter of 2008 amid declining revenue. During a conference call with analysts, interim CEO Jerome Kern suggested that Playboy would be open to a sale of the company.

Christie Hefner last week declined to comment on events at the company since she left, or about growing signs that Playboy is in trouble.

During this Exit Interview with Condé Nast Portfolio, which was conducted in January, however, Hefner insisted that the company was not in distress.

"This is a recession," she said. "I don't think anybody thinks their company is going to do great next year, but Playboy is certainly in a strong position to weather the recession. So it'll be fine in the recession and then, whenever the economy in the U.S. and globally starts to recover, Playboy will grow from its licensing and digital initiatives again."

You're severing ties with the company-giving up your board seat and stepping down. Why? If I'm going to make this move-particularly with the election of Barack Obama-now is the time. It's not about wanting to be CEO of another company. I never planned to spend my career in the family business. I took it over because the company got in trouble.

What's next? I want to be involved in how we develop leaders. I know Barack and have worked for him since he announced he was running for the Senate. One of the things I most admire about him is that he believes you can combine progressive values with pragmatic problem-solving. So one piece of it will be public policy. I'm going to work with the Center for American Progress. I'm also talking to the International School of Business at my alma mater, Brandeis.

Are you going to pull a Meg Whitman and run for office? No. But it's a legitimate question. My husband and I love living in Chicago. So even the question of taking a job in the administration, which is similar to but different from running for office, is not something that appeals to me.

The company's revenue is down, and circulation has dropped more than 50 percent from its peak of 6.6 million in the early '70s. You're even closing the New York office. Is now a good time for you to go? I couldn't leave if I thought the company was in trouble. It was in trouble when I became president, so I know what that looks like. This is not trouble. It's a bad stock market, a bad ad market, and a recession. We have to be fiscally conservative. There's the expression, "Don't bet the ranch." We call that, "Don't bet the mansion." I don't want to pick up the phone and call Hef and say, "Bad news, honey. The moving van is coming at noon. I found you a lovely two-bedroom in Westwood."

How does the magazine need to change in order to survive? Looking ahead, it needs to be relevant for young men. That has to be reflected in everything from the look of the models and how they're shot to which celebrities are featured to what is covered.

Is there a mistake you made as CEO that haunts you? The things I didn't do were as important as what I did do. In the 1980s, Michael Milken tried to persuade me to let him do a half-billion-dollar high-yield bond deal for the company. I couldn't see how we needed it. Milken said, "First you get the money. Then you figure out what to do with it." I said, "I'd be more comfortable not having that debt."

What have you put off that you'll have time for now? I've gone on record with my husband to say that I'd like to redo our kitchen, because I love to cook and entertain.

How many pairs of Playboy jeans do you own? Zero. I avoid wearing the Playboy insignia because it makes it inevitable someone will recognize me. I'm remarkably successful at being invisible, until I pull out a credit card and somebody says, "Oh, how's your dad?"

Visit Portfolio.com for the latest business news and opinion, executive profiles and careers. Portfolio.com© 2007 Condé Nast Inc. All rights reserved.

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