Mittelstand

Centuries-old German toy shop conquers internet

Spielwarenmesse 2018
"What is this place?" "It's the internet, Tintin." Source: DPA

Everybody who’s anybody at the international toy fair in Nuremberg knows the name Carl Loebner. The toy seller has been around since 1685, the year Johann Sebastian Bach was born: Also, the year that Christoph Loebner started making wooden dolls in the eastern German town of Torgau. Today, Carl Loebner Toys is run by the 11th generation of Loebners and in a few months the business will pass to the 12th. In May, Ingo Loebner will take over from his father Jörg, who plans to retire at the age of 65.

Back when the company started, those wooden dolls were all the rage. Today, Lego’s VW T1 campervan is a best seller. “We only sold five of those in the shop,” the younger Loebner says. “But we sold 5,000 online.”

Ingo and Jörg Loebner make more than 90 percent of their sales online. Today they sell toys on eBay, Amazon and through the website they launched in 2010. Since then, revenues have soared. Last year, the company shipped out about 100,000 packages. “Every day, two trucks full of toys pull away,” Jörg Loebner said.

“Our customers know that anyone who has been around this long must be honest.”

Jörg Loebner, Carl Loebner Toys

By embracing the internet, the family business has succeeded where others have failed. Even Toys R Us is struggling; last year, the US company filed for bankruptcy and plans to close every fifth store. “Of course brick-and-mortar retailers are suffering because customers are doing more shopping online than in stores,” says Achim Weniger, head of the toys and games trade organization, Vedes. According to German toy retailer association BVS, toy sales nationwide stagnated at about €3.1 billion ($3.87 billion) last year.

Though he won’t give exact figures, Jörg Loebner hints that his company’s has seven-figure revenue. The 18-person company is one of the most important taxpayers in its hometown. “Our customers know that anyone who has been around this long must be honest,” he says.

Since opening its doors in Torgau, in north-western Saxony, 333 years ago, the business has been run by generations of Loebner heirs — often through turbulent times, including economic crises and world wars. During the reign of Napoleon, one Loebner’s failure to pay his taxes brought threats of a death sentence. “We still have the document that threatens execution,” Jörg Loebner said. At one point in 1923, during the height of Germany’s hyperinflation, the Loebners had 3.7 quadrillion Reichsmarks in their coffers.

Spielwarengeschäft in Torgau peilt Weltrekord-Titel an
Teddy bears up front, dolls in the rear. Jörg and Ingo Loebner. Source: DPA

In 1972, when the East German government began nationalizing businesses with more than 10 employees, the nine-person Loebner operation only just managed to stay independent. Since they couldn’t access loans to pay for the store’s holiday inventory, the family had to dip into their personal savings. Goods were scarce in the GDR, but Jörg Loebner’s father plied state wholesalers with rarities such as liquors, bathroom sinks and even Torgau-made windshields for Trabi cars in exchange for fancier toys.

In 1987, Jörg Loebner gave up his job as a procurement manager for the family business. Each morning, at least 20 people would be waiting for the store to open, but profits were slim. “Of the 17-percent markup, we had to pay 98 percent in taxes,” he said.

VW-Bus aus Lego
On trend: Loebner Toys sold 5,000 of the Lego VW T1 camper bus. Source: DPA

After the fall of the Berlin Wall, the Loebners attended the toy fair in Nuremberg again after a long absence, and Jörg Loebner says they were “greeted like kings.” After all, his father was one of the founders of the event.

The family also bought a computer with the “welcome money” the West German government paid out to East Germans after the fall of the wall. According to Jörg Loebner, this was “the foundation of our online shop.” His son Ingo spent six years working at toy stores in western Germany before returning to the company. “For me, it was always certain that I would take over the business,” he said. “Otherwise my grandparents would roll over in their graves.”

For the Loebners, there’s only one sore spot: It is the fact that their toy store isn’t recognized as the oldest in the world by Guinness World Records. Hamleys in London, which was founded in 1760, holds the official title even though Carl Loebner Toys was founded 75 years earlier. According to Jörg Loebner, it’s because the Guinness jury needed to see documentation for every time the business changed hands, a transition that the Loebner family used to settle with a simple handshake. Still, Jörg Loebner is fine with that oversight now. After all, as he puts it, “we don’t need that title to be successful for another 300 years.”

Katrin Terpitz covers companies and markets at Handelsblatt, focusing on Germany’s Mittelstand and family-owned businesses. Amanda Price adapted this story into English for Handelsblatt Global. To contact the author: terpitz@handelsblatt.com

 

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