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Monday, June 7, 1999 Published at 20:09 GMT 21:09 UK


Business: The Company File

Porn brokers go public

The universal truth across cultures - sex sells

The world of business may be about to throw off its staid reputation - and turn sexy.

Europe's biggest erotica goods chain has just taken the Frankfurt Stock Exchange by storm, with a flotation that saw its shares nearly double on their first day.

And a company which organises adult entertainment fairs is planning to go public next year.


[ image: A successful businesswoman: Beate Rotermund]
A successful businesswoman: Beate Rotermund
Adding to the World Wide Web's reputation as a haven for smut, both groups want to use some of their earnings to develop Internet sales.

Beate Uhse, Germany's largest retailer of sex material, last year saw sales of 169m Deutschmarks (£54m), projected to rise sharply this year after a string of acquisitions.

The company raised £40m from the flotation.

It says it needs new capital to expand further into the Internet and into Western Europe, the US and eventually Eastern Europe.

"We are looking for potent markets,"said Chief Executive Hans-Dieter Thomsen. "By that I mean markets with money."

At the flotation launch, scantily-clad girls handed out "sexy sweets" to encourage businessmen to buy Europe's first "erotic stock".

Now Erotica, a company which runs trade fairs in the UK and the US, wants to float itself either on the UK Alternative Investment Market or Nasdaq in America.

Ahead of the move, it hopes to raise up to £8m from investors to help develop its electronic commerce strategy. Company chiefs want to sell sex toys and goods via the Internet.

They have every reason to feel confident of success. In Australia, the country's biggest brothel was doing such good business that it floated on the stock exchange last year.

Policing the listings

UK stock market analyst Justin Urquhart-Stewart believes flotations of companies trading in sex are likely to be successful - for all the wrong reasons.

"Share dealing and pornography don't necessarily sit well together. But I expect there will be other flotations like it, and they are quite likely to be popular because when it comes to money, anything goes," he said.

Likewise, Mr Urquhart-Stewart expects sex-related Web sites to be popular.

But unlike the Internet - which is totally unregulated - he predicts that controversial stock market listings may well be policed by the exchanges themselves in future.

"The exchanges must ask themselves whether they want these sort of companies - and the answer should be no," he said.

At present, exchanges have no written codes on ethical standards, but investors are becoming more green-minded, demanding their money is not invested in firms with links to the arms trade, environmental destruction, animal testing or pornography, for example.

So stock exchanges are beginning to feel this pressure and may draw up their own ethical codes, he says.

Grandma's great plans

Beate Uhse - named after the woman who founded the chain - consists of a chain of shops, porn magazines, a mail order service and Internet sites.


[ image: Companies which deal in pornography generally fare well]
Companies which deal in pornography generally fare well
Beate - now a 79-year-old grandmother, called Mrs Rotermund after remarrying - has been dubbed the Queen of Eurosex. She is a household name in Germany and appears on TV shows.

She launched the company after the war ended, when German women were largely ignorant of birth control. She persuaded a printer to produce leaflets on the subject in return for black-market butter, and sold them door-to-door.

As her business expanded, she opened the world's first sex shop in the town of Flensburg in 1962.

Now the company is aiming to open three new stores and five franchises in Germany each year.

It also has stores in Austria, Switzerland, Spain, Hungary, Poland and Italy.

Beate is living proof of the biggest cliche of the retail business - sex sells.



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