Pioneering German sex shop chain goes bankrupt

Germany's pioneering sex shop chain Beate Uhse said Friday that it has filed for insolvency, falling victim to the rise of erotic e-commerce.

"The Management Board of Beate Uhse AG has decided to take this step because in the advanced negotiations with a group of investors on a financing transaction recently, no agreement could be reached," board member Michael Specht said in a statement.

Beate Uhse, named for its founder -- former World War II fighter pilot Beate Uhse-Rotermund, sold lingerie, sex products and erotic films in stores across Europe.

The shops were seen as leading a post-war change of attitude to sex and erotic pleasure.

Uhse, who died in 2001 at the age of 81, opened her first shop called Institute of Marital Hygiene in the German town of Flensburg.

That store selling lingerie and contraceptives became the world's first sex shop, according to the company's website.

Over the decades, Uhse expanded her empire, opening a sex TV channel, putting stores near German highways and hitching up with T-Online, the Internet unit of German telecoms giant Deutsche Telekom, in an exclusive on-line shopping deal.

In 1999, it became the first sex goods company to list on the Frankfurt stock exchange.

The group also attempted to expand its market by distributing a line of halal sex products in 2014.

But as sex products moved online, Beate Uhse, which currently has 43 stores in Germany, suffered.

Pornographic films, once a staple of the chain, can now be seen freely online, while discreet online ordering rendered the existence of many brick and mortar stores obsolete.

"The traditional sex shops will not survive as they are," Otto Christian Lindemann, the German group's director predicted in 2007.