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British company Lovehoney acquires the majority of the Swiss sex toy market leader Amorana. The two founders remain on board and want to expand abroad.
Sex toy purchases have skyrocketed during the crown lockdown.
Members of Germany’s Jacobs business dynasty, who made their living from chocolate (Barry Callebaut), coffee, and job placement (Adecco), seem to have found another surprising area of activity. With the extensive resources of Jacobs Holding, one of the largest dental chains in the world (Colosseum Dental Group) was built in just a few years through the family holding company. Since the death of the company’s founder, Klaus J. Jacobs, in 2008, two of his sons, Philippe and Nicolas, have served as co-chairs of the Zurich-based holding company. Its sole beneficiary is the entrepreneurial family foundation.
The investment banker sees potential
At the same time, Philippe Jacobs, 36, founded Telemos Capital in London about three years ago, his own private equity firm, which operates completely separate from the holding company. Hunting areas are Europe or companies with a high cash flow business model that are well managed. The former investment banker, who worked at UBS and the Royal Bank of Scotland, had his first engagement in mid-2018 to Lovehoney.
The Bath, England-based company was founded in 2002 by a musician and tech journalist, has grown rapidly and is now the UK market leader in the sex toy industry. The acquisition of a majority stake was refinanced a year later through a line of credit with several banks (including Credit Suisse) worth £ 50 million (CHF 60 million). The two founders remained loyal to the company in the operating business.
The entrepreneur and founder of the start-up Alan Frei.
Telemos is now proceeding in a similar way in Switzerland. This week, Lovehoney acquired a majority in the Swiss market leader in the sex toy segment, Amorana. No information is given on the purchase price. The two founders, Lukas Speiser and Alan Frei, will only have a minority stake, but will retain their operational positions in the company founded in 2014. “Amorana remains completely independent from an operational point of view, my work remains the same,” he says. Frei.
Boost thanks to corona pandemic
Amorana employs 34 people, is profitable and, according to its own statements, has a turnover of “double-digit million.” During the lockdown period this year, sales have exploded. It has tripled compared to the previous year, and even seven times for customers over 65, Frei says, adding: “This year we are profitable and we will achieve sales growth of more than 60%.”
Due to rapid expansion, the offices of the previous location in the industrial district of Glattbrugg had to be abandoned to double the warehouse. As of this week, Amorana employees have been working from new offices in the Glatt Mall.
According to Frei, the search for a partner with the same vision began two years ago. The sex toy industry needs to get out of its dirty corner and it could become a mass market. “That’s why we wanted to join a big one.” Unlike other industries, there are no pan-European leaders in their industry yet, Frei says. The competitor Amorelie, about three times as large, belonging to the ProSieben-Sat1 Group since 2015, is large in Germany, Lovehoney in Great Britain. In fiscal 2017/18, Lovehoney had sales of £ 100 million, of which 60% came from the domestic market.
The founders of Amorana are convinced that, together with Lovehoney, they will not only be better positioned geographically, but will also benefit from better purchasing conditions. “Economies of scale are also important in our business,” says Frei. Therefore, Amorana customers can expect a wider range. In two years it should go from the current 12,000 to 40,000 different articles.
Erotic at Manor and Coop
According to Frei, the offer has also been expanded thematically. Now it also includes disinfectants, fertility products, pregnancy tests, and breast pumps. Sales channels have also diversified: last year the Advent calendar featuring erotic items was also offered at Manor for the first time, with tens of thousands of items sold annually. About a tenth of the calendars were sold through this retailer. Thanks to this success, the calendar will also be included in the Coop City and Import Parfümerie range this year.
In the future, Amorana also wants to work with pharmacies under the motto “sexual health and wellness”. The removal of taboos on the use of sex toys is apparently intended to open up a multitude of new opportunities for the industry.
