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Tuesday, 28 August, 2001, 15:00 GMT 16:00 UK
Sex-shop chain's sales surge
Beate Uhse's flagship store in Flensburg
Beate Uhse is modernising its store network in Germany
Germany's economy may be grinding to a halt, but some businesses never seem to go out of fashion.

Beate Uhse, Europe's only publicly-quoted sex-aids company, enjoyed a massive 76% surge in sales in the first half of the year.

The firm, whose eponymous founder recently died, said the motor of growth was buoyant business at its retail chain.

At the same time, most of Germany's other retailers are suffering from stagnant consumer spending, as consumers cut their expenditure on non-essentials.

Beate Uhse shares, quoted on the Frankfurt Neuer Markt, bounced by 3% on the results.

Profits double

The company said that first-half sales jumped to 205.4m Deutschmarks ($66m; $96m), while core profits nearly doubled to 22m Deutschmarks.

The second quarter of the year is traditionally the weakest, the firm said, but this year it managed to reverse that trend completely.

It attributed the strong retail performance at least in part to its responsiveness to consumer trends.

The firm operates a network of 206 stores - including outlets in Austria, Switzerland, Italy, Spain and Portugal.

In order to squeeze as much as it can out of the dozy German retail market, the firm plans to modernise its outlets in Germany.

The company has focused heavily on marketing, and has profited from targeting its products at female consumers.

The firm has branched out into multimedia and online offerings, including plans to launch a service via third-generation mobile phones.

It said, however, that its customers remain traditionalists. Videos and underwear are among its biggest sellers.

Logistical leader

Beate Uhse, which claims to have opened the world's first legitimate sex shop, in Flensburg in 1962, has recently become a pioneer in advanced logistical techniques.

The firm was an early user of call-centres, and is considering centering all its Europe-wide distribution in one location, possibly the Netherlands.

The stronger results also reflect the performance of its Dutch subsidiary, included in its overall balance sheet for the first time.

The company is planning to make its first move outside Europe, and aims to have a wholly-owned US subsidiary by 2003.

Shares stable

Beate Uhse's shares have not exactly been stellar performers, barely budging from their current level over the last 12 months.

But in comparison with the rest of the Neuer Markt, a market aimed mainly at supposed high-growth technology and media stocks, they have stood out.

The Nemax 50 stock index has lost more than 80% of its value since the middle of last year.

See also:

16 Aug 01 | Business
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