Sunset Store Thriving, But National Roll-Out Delayed

The spinning globe above the entrance of Larry Flynt's Hustler Hollywood store brashly proclaims that his X-rated approach to retailing is not for mainstream America but instead "for the rest of the world."

Yet it seems the rest of the world will have to wait a while before Flynt gets around to exporting his experiment in mainstreaming porn to the masses.

Two years after Flynt opened his gleaming 9,000-square-foot retail store on the west end of Sunset Strip, officials at Larry Flynt Publications say business is booming. Annual profits reportedly are surpassing $1 million. Still, Hustler's ambitious plan to open up to 40 more stores nationwide is unfolding far slower than initially anticipated.

Except for one other store operating in the Cincinnati area and one planned for Dayton, Ohio, Hustler Hollywood is it for Flynt. Retail remains a minor component of the Hustler empire, which includes about 20 magazines, a dozen Web sites, mail-order sales, video production and cable and satellite television operations.

Retail operations accounted for less than 5 percent of LFP's 1999 sales of $142 million. That percentage will be about the same this year, with company officials projecting revenues to top $150 million.

Not too worry, said LFP President Jim Kohls, who nonetheless pointed to retail as well as Hustler's video and Internet divisions as the company's best bet for grabbing a bigger slice of the $10 billion-a-year adult entertainment market.

Kohls said LFP is planning to open one or two more Hustler stores in 2001.

"We are a little bit behind," he conceded. "Right now we're exploring locations in New Orleans, Miami and other cities. If we find a good location that makes sense, we'll open a store. We are not going to open a store just for the sake of opening one."

So far, Hustler's Sunset Boulevard location, with its picture windows, wide aisles, espresso and mix of male and female shoppers, remains an anomaly in the often seedy world of adult book and novelty stores.

Not just a clean, well-lit place to shop for smut, Hustler Hollywood represents a bold experiment in adult-themed retail. With its high-profile location on the Strip, wide array of products and emphasis on safe sex and fun, Hustler Hollywood aims to obscure the darker side of pornography by creating a hip, stigma-free market for adult products.

So far, the strategy seems to be working on Sunset. Whether it will play in Peoria or Pittsburgh remains to be seen.

Unlike in other cities, such as Cincinnati, where Hustler has been targeted by protesters and dragged into court to defend its products, the Hollywood store has created barely a ripple of opposition.

It's also garnered strong reviews from consumers.

"I think it's great. I've been in adult bookstores that are sleazy, but this is upscale and really nice," said Thomas Hendricks of El Centro, who visited Hustler Hollywood on a recent weekday afternoon with a female friend who was visiting from out of town. "I'm tired of those groups that say sex is bad. There are too many prudes out there. Get over it."

That sex should be fun is the dominant theme inside Hustler Hollywood, where endless potions, lotions, oils and cremes vie for shelf space with leatherwear, lingerie, Hustler apparel and, of course, a wide selection of X-rated magazines, videos and DVDs. A built-in cafe serves coffee and smoothies and a prominent sign reminds uneasy shoppers to "Relax. It's Just Sex."

To help store managers relax, and to avoid the sort of unsavory loitering that characterizes many other adult bookstores, all publications are sealed in plastic to prevent on-site browsing. Also toned down is a video screen that offers strictly R-rated previews of new releases, sidestepping open displays of frontal nudity and graphic sex acts.

Pursuing profits

Since opening in December 1998, Hustler Hollywood has reportedly generated profits of about $200,000 a month, on average.

"It's a very profitable store. Our sales have more than doubled since we opened," Kohls said. "The look of the store is very appealing. We've been very popular with tourists and people in Los Angeles as well."

Of course, that healthy bottom line does not factor in the cost of the Sunset Boulevard building that Flynt purchased to house the store. Hustler Hollywood does not pay rent, but LFP paid $4.7 million for the 19,500-square-foot building. A music business leases the upstairs portion.

Chuck Dembo of Dembo & Associates, a Beverly Hills commercial real estate company, said Hustler Hollywood is a good fit on Sunset because it draws curious clubgoers and diners. Other retail businesses, such as clothing stores, don't fare as well on that portion of Sunset, which comes alive at night.

"I don't think it makes big money, but it works as advertising," Dembo said. "It gets the Hustler name out there. Everybody who drives by sees the Hustler name."

But Kohl insists the retail store is focused on the bottom line, not just promoting the Hustler brand.

"The advertising definitely helps, but we're doing this for the profitability of that specific business," Kohls said.

LFP real estate agent James Fuller of Westmac Commercial said Hustler Hollywood has been successful on more than one level.

"(Flynt) looks at it with two hats, one as a retailer and one as a property owner. Right now, it's working in both ways," Fuller said. "He has received some very good offers for the property, but he's declined to respond."

Kohls said that, based on the success of Hustler Hollywood, LFP is still primed to grow its retail business in the years ahead.

"With the look and feel of the store, people see it and they don't have a problem with it; they want to come in," Kohls said. "We will continue to expand. It's a matter of finding the right location and the right circumstances."

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