MW Playboy secures big legal victory in China as it seeks to turn its fortunes around

By Lukas I. Alpert

The media and lifestyle brand was awarded $81 million in a dispute with its former biggest partner in China that had cut key licensing revenue by two-thirds

Licensing of Playboy-branded clothing and accessories, particularly in China, has become a significant part of Playboy's business in the past 20 years. A long-running legal dispute with a former Chinese partner had caused considerable revenue declines in recent years.

This is some sexy news for Playboy.

The long-running media and lifestyle brand has secured a major legal victory in a bruising fight with its former biggest partner in China that had resulted in the loss of nearly two-thirds of the company's licensing revenue.

Playboy Inc. (PLBY) was awarded $81 million by an arbitration court in Hong Kong, bringing to a close a three-year dispute with the company's onetime largest licensee in China, where Playboy draws significant revenue as a lifestyle and apparel brand.

The legal victory comes during a period of rebuilding for Playboy, which has seen its stock fall as much as 99% since it returned to public markets in 2021 as part of a transaction with a special acquisition company. Its stock price has rebounded in recent months and was trading at a seven-month high at Friday's closing.

Since the company went public after a decade as a privately-held business, Playboy has seen its annual revenue decline to $116.1 million, from $246.6 million in 2021. That was in part due to the fallout from its legal battle over its licensing operations in China, which has long been a cornerstone of its business.

The fight with the licensee, New Handong Investment (Guangdong) Co., Ltd., dates back to the end of the COVID pandemic, when Playboy accused its Chinese partner of failing to pay required royalty payments for the right to produce apparel and leather goods branded with the Playboy name and bunny-ear logo.

Playboy said a subsequent audit revealed that New Handong had for years been underreporting royalties, producing and distributing unauthorized products and failing to make agreed-upon marketing investments.

The legal fight landed before the Hong Kong International Arbitration Centre, which ruled in Playboy's favor on Friday, awarding the company $81 million in damages. The ruling is binding and is not subject to appeal, Playboy said.

"We have one of the most recognized and undervalued brands in the world," said Ben Kohn, Playboy's chief executive. "We are thrilled with the outcome and will continue to aggressively pursue those that violate our IP and trademarks. This is a major milestone as we continue to rebuild our China business."

New Handong has until Sept. 20 to pay, although Playboy noted there was no guarantee it would be able to collect the penalty.

Attempts to reach representatives of New Handong for comment were not immediately successful.

China has long been a bright spot for Playboy as it watched its famed magazine and media business decline in recent decades. Playboy magazine has never been sold in China, so it is mostly known there as a lifestyle brand and is popular as a clothing and accessories business.

Prior to the COVID-19 pandemic, Playboy said its partners in China brought in over $1 billion in sales of Playboy-branded merchandise, earning Playboy $40 million in licensing fees from China alone. Licensing revenue from China dropped to $14 million last year, Playboy said.

Playboy licenses its brand to several local manufacturers in China, but said New Handong had long been its largest partner in the country, paying $20 million in licensing fees annually.

Playboy said it terminated its deal with New Handong in 2023, but that the company continued to produce Playboy-branded products, which negatively impacted the sales performance of Playboy's other partners.

Since going public, Playboy has sought to reinvent itself as a leisure and lifestyle company, investing in adult pleasure products and social-media businesses to compete with brands like OnlyFans. That company has reported net losses in each of its past 13 quarters, and had amassed debt of over $200 million toward the end of 2024.

In 2020, Playboy ceased publishing its iconic print magazine after seven decades on the newsstands, but brought it back earlier this year as a one-off for 2025, with plans to publish it quarterly next year.

Last year, the late Playboy founder Hugh Hefner's son, Cooper Hefner, offered to buy Playboy for $100 million. The company rejected the bid and brought in an outside investor, Luxembourg-based Byborg Enterprises S.A., which took a roughly 17% stake in the company. Playboy also renegotiated some of its debt, bringing its total indebtedness down to just over $100 million.

-Lukas I. Alpert

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September 07, 2025 16:33 ET (20:33 GMT)

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