FLENSBURG, Germany — Pioneering adult retailer Beate Uhse AG last week initiated bankruptcy proceedings with the aim of restructuring operations of the European chain that sells lingerie, adult DVDs and sex toys and novelties.
Beate Uhse’s application for insolvency, which is equivalent to Chapter 11 in the U.S., would allow for a plan of reorganization to keep the business running and pay creditors over time under jurisdiction of the court system.
Revenue has been on a long slide for more than a decade for the Flensburg, Germany-based company, which grew to 300 stores with sales peaking at €285 million in 2005.
In 2015, Beate Uhse counted 200 stores owned and franchised stores across seven countries in Europe. It generated sales of €129 million.
But in recent years, Beate Uhse, whose shares trade on the Frankfurt Stock Exchange, has felt pinched with even lower sales. It has closed scores of stores and dropped its print catalog to focus on online sales because of increased competition from the likes of Amazon and others.
Friday’s bankruptcy petition was related to an announcement that it could no longer be able to service its debt — €30 million due for repayment in 2019 — and that there was no agreement with creditors to refinance it.
Michael Specht, who took over as Beate Uhse’s CEO in April, said in a statement on Friday that the company was late to the game as an online retailer — and that has been hindrance to sales.
“It’s been a big challenge to continue the company’s rich tradition in a modern, digital form,” he said.
But Specht said that he’s hopeful for the 71-year-old company, which started as a mail-order business and blossomed into the world’s first sex shop, particularly after Germany relaxed its antipornography laws in the 1970s.
"We have followed a path in which we are very confident that we will be able to restructure the group as a whole," he said.
Beate Uhse AG is being advised over the reorganization by the law firm BBL Bernsau Brockdorff & Partner.