Beate Uhse Reports Improved 2nd Quarter

HAMBURG, Germany — Sex toy retailer Beate Uhse reported a turnaround in lagging sales and earnings, and company CFO Otto Christian Lindemann said 2007 will be a year of transition.

While the company's mail order division — the company's largest business division — is still down, Beate Uhse reported figures at the retail division were "pleasingly stable," and with Lindemann's plans to revamp his stores' image to attract a younger clientele, he said he is more than confident that Beate Uhse will be back on course by the end of the year.

Lindemann has commissioned an industry think tank to collect market research, analyzing consumer trends and customer demographics in the erotica market to makeover his stores with the right image.

Beate Uhse reported that its Dortmund and Munich shops have been redesigned with a more youthful "sex style." Though it still is in the testing phase, Lindemann said both stores "have been a hit from the very start."

Sales at Beate Uhse's Adam & Eve branded shops in France grew by 29 percent, the company reported. This, added to June's overall improvement in brick-and-mortar sales, makes Lindemann optimistic that Beate Uhse will undergo a complete financial turnaround in 2008.

In the first half of 2007, Beate Uhse reported more than $173 million in sales and more than $1.6 million in earnings, which Lindemann said was far from satisfactory.

"It remains to be seen whether it will be possible to make up for the dip in sales in earnings caused by the difficulties in the mail order division before the end of the year," Lindemann said. "While 2007 will be characterized by preliminary work to achieve the turnaround, 2008 will see us successfully reaping the benefits."

In addition to the stores' overhaul, Lindemann recently announced Beate Uhse's production company, Daring Media Group, has recruited Italian adult film director Antonio Adamo, French glamour photographer Christophe Mourthé and English director Kendo to produce new content.

Lindemann said he plans to distribute Daring Media's "high-class erotica" on all platforms, including IP-TV, video-on-demand and mobile channels.

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