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Pain for company behind world's first sex shop

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It is a German institution – a retailer that once boasted 150 outlets and was listed on the junior market on the Frankfurt Stock Exchange.

But now Beate Uhse, once the world’s biggest retailer of erotica and sex toys and a pioneer in the field, has been put in its place by the internet in the same way as many other traditional store chains have.

The business has filed for “insolvency under administration”, the German equivalent of “Chapter 11” in the US, enabling it to continue trading while it seeks new investors and attempts to complete a financial restructuring.
The company is currently unable to service its debts, including €30m (£26m) repayable in 2019, while it reported in October a loss of €6m for its most recent financial year.
Beate Uhse takes its name after its founder, a female former Luftwaffe captain and fighter pilot, who was banned from flying after the war by the Allies and, looking for work as a war widow, began selling toys door-to-door.

Image: Beate Uhse is credited with opening the world’s first sex shop
In doing so, she came across many German women with unwanted pregnancies, a legacy of the way Hitler had suppressed advice on birth control.
This inspired her to write a pamphlet on natural contraception, based on information she had learned from her mother, one of Germany’s first woman doctors.
She had to give a printer five pounds of butter – accumulated with six weeks’ worth of food coupons – to get him to print it.
The two-page pamphlet, called Document X, sold 32,000 copies at 2 Reichsmarks each during its first year.
From that, Ms Uhse went on to sell other brochures, including one called Is Everything Right in Your Marriage?.
From that, Mrs Uhse set up a mail order business selling contraceptives and what used to be euphemistically described as “marital aids”.
She later recalled: “In Germany, after the war, it was no great feat to sell goods. The art was in getting hold of the goods to sell.”
Yet her activities were not entirely in keeping with post-war German morality. She was quickly fighting the first of more than 2,000 legal cases with which she was confronted during her career – she was fined only once – as she struggled to prove that the condoms she was selling by mail order were only being used by married couples.
The mother of three always robustly defended what she did, though, with the decision of a tennis club to ban her from membership apparently the only occasion when public disapproval of her business caused her genuine unhappiness.
The “Wirstschaftswunder”, the miraculous rebuilding of the West German economy in the 1950s and 1960s, ensured she had plenty of business and, in 1962, she opened her first shop – the world’s first sex shop – in her home town of Flensburg, northern Germany.
The business quickly thrived as German attitudes to sex became more liberal in the 1960s with the arrival of the contraceptive pill.

The company went on to enjoy explosive growth during the 1970s, particularly after West Germany legalised pornography in 1975, with Mrs Uhse insisting her output was more tasteful than the “awful stuff” put out by the Scandinavians.
By the end of the decade, Beate Uhse employed more than 450 people and owned a condom manufacturer, a lingerie manufacturer, a film distribution arm and a pharmaceuticals business selling various oils and aphrodisiacs.
She was also adept at marketing: the company sponsored Germany’s answer to Woodstock, the Love and Peace Festival in 1970 on the island of Fehmam, where Jimi Hendrix gave his final performance.
The company opened its first shop in the United States in 1981 and, in 1986, revived her mail order operations which had, at that point, been superceded by bricks and mortar stores.
The AIDS pandemic of the late 1980s boosted condom sales and, when the Berlin Wall came down in 1989, German reunification provided another sales boost as millions of East Germans clamoured for goods they had previously been denied.
Mrs Uhse was distributing her brochures to the old East Germany within a fortnight of the wall coming down. Expansion across Europe followed, but not in the UK, where tighter legislation on pornography capped what the company could sell.
By the mid-1990s, Mrs Uhse was one of Germany’s most famous people, her fame capped by the opening in 1996 of the Beate Uhse Museum of Erotic Art in Berlin.
Then, in 1999, came the decision to float on the SMAX, the German equivalent of the UK’s Alternative Investment Market, with the shares quadrupling within days of beginning trading to value the company at north of €250m.
With hindsight, though, this was the moment when Beate Uhse was at its zenith.
The company was valued at €400m when Mrs Uhse died in 2001 at the age of 81 and the rapid growth of the internet meant people no longer had to visit the firm’s shops to buy pornography discreetly.
From 150 shops at its peak, Beate Uhse now has just 30, with annual sales peaking at €285m in 2005.
The mail order business was flattened by the likes of Amazon while attempts to relaunch the business, most recently based on the Fifty Shades of Grey phenomenon, also backfired.
Also conspiring against the company were rivals such as Victoria’s Secret, which were perceived as more upmarket, as well as nimbler new rivals explicitly catering for women customers in a way Beate Uhse did not.

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A new chief executive, Michael Specht – a former boss of Starbucks in Germany – took the helm in April this year, but to date has been unable to reorganise the company’s debts. He was insisting this week a turnaround was still possible.
Whether he succeeds or not, it will not diminish the legacy of Beate Uhse, one of the most transformative and remarkable figures in German post-war history.

Source: SKY