Nasdaq-listed global leisure lifestyle company Playboy Inc has agreed to sell 50% of its China business to consumer brands operator UTG Brands Management Group for $122 million, while it retains the remaining half of the ownership.
Under the definitive agreements, the Miami Beach, US-based men’s lifestyle and entertainment magazine company will receive $122 million in total cash. This includes $45 million payable over two years in exchange for UTG’s acquisition of a 50% interest in the joint venture (JV) for Playboy’s China business, $67 million in guaranteed minimum distribution payments over eight years, and $10 million in brand support payments over the next three years.
UTG already paid a $9-million deposit against the purchase price, and the initial closing of the transaction is expected to happen by March 31, 2026, subject to customary closing conditions.
Upon closing, UTG will manage all operational aspects of Playboy’s business activities in mainland China, Hong Kong, and Macau, according to an official statement by Playboy.
In addition to the annual guaranteed minimum distribution payments, which will equal or exceed Playboy’s current net cash flows from China, Playboy said that it expects to receive incremental annual distributions from its remaining ownership in the JV as UTG grows the business.
Playboy plans to use a minimum of $50 million of the proceeds for debt reduction to further de-leverage its balance sheet, which is expected to be “immediately accretive” to its earnings, said the company.
Founded in Chicago in December 1953 by Hugh Hefner, Playboy was started as a revolutionary men’s lifestyle magazine known for its progressive sexuality and high-quality interviews during a conservative era, with its first issue famously featuring Marilyn Monroe on the cover. It expanded into the apparel industry with its iconic Bunny uniforms in 1960 and then marched into retail in Asia in the early 2000s.
Its latest financial results booked $29 million in total revenue for Q3 2025, down slightly from $29.4 million a year earlier. Its Q3 net income was $0.5 million, or breakeven per diluted share, due to $2.5 million in legal fees related to litigation against former licensees.
The deal makes “a meaningful investment in the future of the brand in China,” said Ben Kohn, CEO of Playboy. He said that it positions Playboy for “sustained, long-term growth in one of the world’s most important consumer markets”.
“In addition to the $122 million of contracted payments, we expect that our continuing 50% ownership will provide meaningful upside, while materially simplifying our operating model,” said Kohn.
UTG is part of Hong Kong-headquartered United Trademark Group, which currently manages a diverse portfolio of over 10 brands, including the China operations of the likes of US workwear and lifestyle brand Dickies and sports brand Jeep Clothing, with over $1.5 billion in combined annual retail sales across 12 countries.
In 2008, UTG acquired the Pierre Cardin rights for footwear and leather goods in China.
Through a mix of owned and licensed brands, the parent group leverages its highly competitive retail distribution network in China, with brand offerings spanning lifestyle apparel, footwear, accessories, and more.
Wenming Zhang, CEO of UTG Brands Management Group, said: “Looking ahead, we will leverage a global perspective combined with strong local insight to reimagine and strengthen the brand’s appeal—remaining true to its heritage of gentlemanly leisure while embracing the spirit of diversity and innovation that defines the modern era.”
The deal is the latest example of an ongoing trend of multinational consumer brands divesting China businesses to professional managers due to fierce local competition and shifting consumer habits to refocus on the home market.
Earlier examples include Starbucks’ sale of a 60% stake in its China retail unit to Boyu Capital, CPE’s acquisition of an 83% stake in Burger King’s China operation.
