Beate sexy lingerie supplier Uhse would like to sell more than sex

FREIE UND HANSESTADT HAMBURG, Germany wholesale underwear China Making love may promote, but reselling sex could be expensive.

Germany's Beate Uhse, the wholesale underwear China planet's largest making love retailer simply by revenue, can be investing heavily to adapt its image to changing tastes and morality and plans to build its brand through new 'lifestyle' products including drinks.

The company -- whose sales fell back in 2006 after a long run of growth -- is spending up to 5 million euros a year to revamp its stores, and putting more money into what it hopes will be "more fashionable products".

"We have love bags, which is a bag with products that make sex more fun, exciting, " Chief Financial Officer Otto Christian Lindemann told Reuters in an interview.

"Take a love bag home, have a love experience. "

The love bags, with names like One-night and Sexplorer, contain lubricants, vibrators, body paint chocolate, champagne and CDs of erotic stories, among other products.

The company says the days when a sex shop's main function was selling porn to men are over. The Internet has allowed men to watch porn at home: DVD sales are down. So Beate Uhse is trying to lure more women and couples to its stores.

Porn's share of sales has fallen to about 35 percent and will decline more as erotica products gain and the company starts offering other products like wine and beer, joining other firms extending their brands deeper into people's lives.

 

"There is going to be a big shakeout in the sex shop retail business in Europe, " Lindemann said. "Europe has thousands of sex shops, most of them strongly dependent on DVDs. Many of them will not survive.

"In the future we'll still have DVDs but not that many, " said Lindemann, whose company had sales of about 271 million euros in 2006, higher than Playboy or Larry Flynt Publications, which publishes Hustler.

Finding a subsititute for the bread-and-butter DVD business and luring women to its shops will be tough, as Beate Uhse has found before with its Mae B stores aimed primarily at women. The last of three Mae B stores will close once its lease runs out.

ONE SHOP, FOUR SECTIONS

Its new store in Munich and recently renovated shop in Dortmund are divided into four sections. Near the entrance are "fun products like massage oils, lubricants", Lindemann said.

Then comes lingerie, where women can change in cabins and check their look under different lights. The third part contains DVDs and the fourth what he called "harder stuff" like dildos, handcuffs and leather attire.

Beate Uhse, started in 1946 by a former female pilot with the same name, is determining how many of its around 130 company-owned and franchisee stores in Germany to renovate.

It operates around 330 sex shops in 11 countries and has mail-order operations in nine.

Beate Uhse is "one of the top-selling" firms in the sector, Gregor Elze, an analyst at BayernLB, wrote in a research note.

"By expanding into countries it has declared promising new markets, notably Poland, Slovakia, Spain and the Czech Republic, Beate Uhse should generate substantial sales growth, " he said.

One of only a couple of analysts covering Beate Uhse, which is 60 percent owned by five private investors, Elze rates the share a "buy" with a target of 5. 12 euros based on its growth potential.

Beate Uhse shares have performed weakly, underperforming German retailers and trading between 3. a few and 6 euros in the past year. That is below their 1999 stock market debut of 7. 20 pounds and a peak about 29 pounds during the Net boom it happened in 1999.

"We're in really good form to have great figures in the foreseeable future because the facilities is set up. 3 years ago will be a day of move, " Lindemann said.

"At the end during, whatever fresh direction put into effect, we want to build an income. Selling erotica is different than selling adult. And we will do it right. inch

But it may well yet confirm challenging.

On the Beate Uhse store close to Hamburg's primary train station about Saturday nighttime all 6 customers had been men. And one of them informed Reuters he'd never acquire Beate Uhse beer.