Friday, August 06, 2010

THEO ALBRECHT PASSED AWAY. DON'T KNOW THE NAME? I BET YOU HAVE BEEN IN ONE OF HIS STORES

Reclusive Salesman Built Aldi Discount Empire
Theo Albrecht, one of two reclusive brothers who founded Aldi, the German discount supermarket giant, and helped revolutionize shopping world-wide, died Saturday (July 24th), the company said on Wednesday. He was 88 years old.From a bare-bones food store handed down by their mother in 1946, Mr. Albrecht and his older brother, Karl, built an international retail empire of no-frills grocery shopping that was a discounting pioneer and forerunner to Wal-Mart Stores Inc. and others. The brothers' business, which includes Aldi stores across Europe, the U.S. and Australia and the Trader Joe's grocery chain, generated about €53 billion ($69 billion) in revenue last year.
For more than half a century, the Albrechts wavered little from their big-discount formula. By cutting out costly extras such as large marketing budgets and fancy displays and selling a limited assortment of mostly nonperishable goods, they were able to undercut competitors—and attract droves of thrifty German shoppers during the post-war decades. Their success gave rise to dozens of copycat discounters at home and elsewhere in Europe.
It also made the Albrecht brothers among the richest men in the world. With a fortune of nearly $17 billion, according to Forbes, Theo Albrecht was ranked the world's 31st-richest person in 2010. (He fell from ninth place in 2009.) Karl Albrecht, 90, was ranked 10th, with an estimated net worth of $23.5 billion.
In Germany, the Albrechts were known as much for their rags-to-riches story as their reclusiveness. Both brothers lived in near-total seclusion and remained secretive about even basic biographical information, such as their birth dates. One of the last rare public photos of either brother was of Theo Albrecht in 1990—and that was taken surreptitiously.
One reason for the secrecy was the 1971 kidnapping of Theo Albrecht, who was abducted by two men in the northwest German town of Essen and held for 17 days before being freed for a ransom of seven million marks (about €3.3 million), an amount that Mr. Albrecht was said to have haggled down with his captors. The kidnappers were caught and prosecuted shortly after but the episode pushed the already-private Albrechts further into seclusion.
Theo Albrecht, who hadn't been active in his company's operations for years, had been ill for some time. A private family funeral was held Wednesday.
"The retail industry has lost a huge figure," said Stefan Genth, head of the German Retail Trade Association in a statement. "There are few people who have shaped an entire economic sector as Theo Albrecht has."
Born in 1922, Theo grew up with his brother in their mother's shop in Essen. Their father developed emphysema and could no longer work in the mines. After serving in World War II, the two brothers expanded the shop into a chain of more than a dozen stores. By 1961, they had changed the name to Albrecht's Discount, or "Aldi" for short.
Soon after, the brothers decided to split up their empire, reportedly over a dispute about whether to sell cigarettes, and agreed to stay out of each other's territory. Theo took charge of the stores in the northern part of then-West Germany, Aldi Nord, expanded in Europe and acquired Trader Joe's in 1979. Karl took on the southern German stores and expanded Aldi into the U.K., Australia and the U.S. Combined, Aldi has more than 8,200 stores world-wide, about half of them in Germany.
Theo Albrecht ran Aldi Nord until the mid-1990s. Though he withdrew from the day-to-day operations after that, he attended board meetings until a few years ago when his health began to decline.
His two sons, Theo Jr. and Berthold Albrecht, have positions at the company, but its top management is from outside the Albrecht family.
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