UPDATE 2-Branson's Virgin does not want to buy Playboy

* Virgin Group statement contradicts Daily Mail report

* Playboy shares up less than 1 pct after falling 8 pct (Adds Playboy comment, background on sale reports)

By Robert MacMillan

NEW YORK, May 28 (Reuters) - British entrepreneur Richard Branson's Virgin Group does not want to buy adult entertainment magazine publisher Playboy Enterprises Inc (PLA.N: Quote, Profile, Research), the company said on Thursday.

"Reports that Virgin Group is looking to buy Playboy Enterprises ... are untrue," said a statement e-mailed by a company spokeswoman.

Virgin made its statement after the Britain-based Daily Mail newspaper reported Virgin was "tipped as a potential buyer."

Playboy owns one of the best-known adult magazines, but it has suffered financially because of advertising cutbacks and other effects of the recession. It posted a $13.7 million quarterly loss in May on a more than 20 percent revenue decline.

Christie Hefner, daughter of founder Hugh Hefner, resigned as chief executive earlier this year.

Interim Chairman and CEO Jerome Kern said in February the company would be "willing to listen" to suggestions about selling the company or changing the magazine.