Benedikt Taschen has made a fortune publishing fine art books at knock-down prices. What is his secret? His sharp business sense? His aesthetic discernment? Or his unfailing instinct for a good set of dirty pictures?

AS MINI-BOOKS and Wordsworth Classics pile up and anxious small bookshops hack into their margins to drop the price of Delia Smith's Winter Collection, there is at least one publisher who will not have to change his strategy. Benedikt Taschen, the Paul Raymond of art-books, has created a burgeoning empire by applying the time-honoured principles of piling high and selling cheap to the traditionally slow-moving fine arts market - and business is booming. Elsewhere in the publishing industry, old certainties are crumbling, but Taschen's name is everywhere. His books - the flashy, the tacky, the culturally respectable and the plain pornographic - sit as happily among bargain basement remainders as they do in upmarket specialist bookshops - and they sell. Prices begin at pounds 2.99 for a collection of 30 Frida Kahlo postcards and go all the way up to pounds 50 for heavyweight hardback catalogues raisonnes of Van Gogh or Dali. Invariably, they are prices which make other publishers, if not groan with despair, at least wonder how on earth it's done.

How does he do it? It would be tempting to say, on perusing a rack of brightly-coloured Taschens on Kandinsky, Toulouse-Lautrec or Magritte, that Benedikt Taschen flogs images so familiar they're only a step up from an Athena poster. But Taschen's range is more complex than that. There are also the popular poster-books (at pounds 4.99 with six glossy pull- outs): not just Monet's Waterlilies and Picasso's saltimbanques but also, for the more adventurous, Egon Schiele's tormented wraiths and the fantasmagorias of Odilon Redon. Catering for another market entirely is Eric Kroll's Fetish Girls, with its lurid cover photo of a woman with her hand inside her scarlet Lycra leggings, or Betty Page, Queen of Pinups, posing nude with two cheetahs. For the gay market there's Pierre et Gilles's idealised portraits and camp classical tableaux, and Beefcake, illustrated by cult gay cartoonist Tom of Finland. Finally there's the infamous Erotica Universalis, a brick-shaped paperback which offers, for pounds 14.99, 719 mucky engravings and drawings to make one gasp and stretch one's eyes.

"We've sold 15 copies of Erotica Universalis, which is quite a lot for us," says Jo Walton of Atrium, the upmarket art bookshop in London's Cork Street. "It's always interesting to see who's buying the erotica," she goes on - in this case, curators, students, art professionals and passing trade from Regent Street. Perhaps more intriguing, however, is the fate of the twovolume Taschen hardback catalogue raisonne of Chaim Soutine, Modigliani's less well-known contemporary, whose tortured canvases look as though he had been carving in candlewax rather than painting in oil. Atrium has shifted 25 copies. "It is the major serious work on Soutine to be published in decades," enthuses Walton - and, at just under pounds 50, half the price one would expect from any other publisher.

YOU HAVE to go to Germany, to dull old Cologne, home of aromatic toiletries, heavy industry and a blackened, two-horned Gothic cathedral, to penetrate the Taschen empire. The headquarters of Benedikt Taschen Verlag lie north in the fashionable Belgium area where the art galleries congregate, though it's encouraging to note that just up the road is "Dr Muller's Sex World". Much of this area, and indeed Cologne, was flattened in the war, and the Taschen offices are in one of the few remaining turn-of-the-century mansions. I settle in the reception area at the base of the grand staircase, and flick through one of the latest publications, a monograph of Wolfgang Tillmans. A German photographer and stylist, he's most notable in this country for his anti-fashion "Incest" shoot for i-D magazine, featuring two hard-favoured models joylessly fondling each other's private parts in a woodland setting. Then Veronica, one of Taschen's two PAs, a slight young woman with a Titian bob and Edna Everage spectacles, appears. There's been a hitch: Benedikt Taschen has been delayed. In the meantime, how about a tour of the building?

It's worth seeing. Original artworks by the likes of Julian Schnabel and Cindy Sherman hang in the corridors, above the photocopiers and kettles, in the accounts office and the studios, the boardrooms and the canteen. The mostly young workers, when encountered, exude a contagious and unfakeable enthusiasm. On the ground floor is a portrait of the man himself, smirking and juggling books. "It doesn't look much like him," Veronica says, critically. An antique coloured- glass chandelier hangs on one of the landings over a silver-gilt bust of a chap in a full-bottomed wig. At the very top of the grand staircase, suspended from the ceiling, is a wooden model of a gondola filled with tea-chests, by one Martin Kippenberger, himself the subject of a Taschen monograph. On one wall, a scrawly abstract bears the legend: "Geld oder Kultur?".

In the library, with its zebra-striped chairs, pride of place is given to a notorious photograph of Benedikt Taschen with his chief editor, Angelika Muthesias. She rests her hand protectively on his shoulder; he leans his forearm on her thigh; she is completely naked. (Don't worry, though: they're an item.) And anyone sitting down to business in the top-floor boardroom might find their attention wandering from the balance sheet to the huge painting showing, with photographic clarity, Jeff Koons recumbent, inserting his engorged penis into La Cicciolina's descending vagina. "It's so funny to see people's reaction to that picture," gurgles Veronica. "The Japanese are really put off. The French love it."

Benedikt Taschen, when he does finally show up, is in a bad way. There's no sign of his trademark fat cigar. He has the hacking cough, gloomy demeanour and sorrowful face of a beagle. The watch is plastic, the beige suit looks more Gap than Jil Sander, the shoes are inky black and expensive-looking, and his only concession to funkiness is a bandana tied round his neck. He looks fortysomething, as he splutters his way through the interview with frequent apologies: "My English is getting better in the afternoon and evening, but it's poor during the morning, and if I am still with a cold, it's terrible."

He is the first to admit that Cologne, rather than Berlin or Hamburg, is a curious base for a wacky international publishing company. "Cologne is very boring. In no way can this city compare with London or Paris. For me there is nothing of inspiration here, really nothing. But what is positive with Cologne is the mentality of the people - they are nice. Besides, this is simply where I have been born."

Petra, his other PA, bustles in with proofs of another great Taschen opus, a photography book entitled Black Ladies, a "homage to the beauty of African women". Taschen has to make a snap decision. "Everything is ready with the exception of the jacket. As soon as we decide whether it should be laminated or matte, we can bind it up and sell it. I like this matte presentation because - feel it - it's much nicer and more touchable. Glossy is cheaper, though... " (Tellingly, he went for the cheap option.)

The youngest of five children from a middle-class family, Taschen entered commerce at 13, dealing in the Disney comics he began collecting aged seven. "I thought I would be the only one who was interested, but many people want to buy back lost dreams of their childhood. You always come to the question where you have to decide to sell or collect, so I stopped collecting and became a dealer, with a mail-order business of comic books."

At 18, in the Seventies, he was running a new and second-hand comics bookshop in Cologne. He speaks with enthusiasm about his parents, both doctors, who lent him money, never objected to the piles of comics lying around, and didn't push him towards higher education. "It's nice they never blocked me; they thought that a good child has to teach itself. I would never try to tell my children [six, eight and 10] why they should like modern art or whatever. If there is a connection they will start on their own, if not they won't." If the opportunity to buy a collection came up and he needed 4,000 marks in a hurry, his mother always "took care of it... I always felt welcome and they gave me all the self-confidence I need." The coughing reaches a crescendo. He mops his brow and says wistfully, "Maybe go downstairs and eat something now?"

The canteen, with noticeboards, wacky artwork, book displays, Gaggia machine, mounted antlers and funky Fifties styling, caters for the 75- strong staff from Monday to Thursday. Today the imperious grey-bearded Latvian chef, Edwin, who contrives to be both roly-poly and faintly intimidating, is serving vegetable soup and Wiener schnitzel. His official title of chef doesn't do justice to his importance in the organisation: a close friend of Taschen, he is employed to serve up both wonderful food and and odd flashes of lateral thinking. "Zwei Suppe!" he announces with a flourish. It is delicious, pearled with flecks of butter and pungent with saffron, though Taschen is momentarily put out when he splashes his trousers: "Always when I eat soup. Scheisse."

The Taschen story began in earnest in the early Eighties with the impulse purchase of a batch of remaindered books on Magritte; with his bookshop partner he bought all 40,000, then sold them for over twice what he'd paid. The book was cheap and well-illustrated, and the fact that it was in English seemed not to inhibit German buyers. Benedikt Taschen was soon asking booksellers to make the same leap of faith with titles of his own, supplying them in large quantities but non-returnably (one reason why they turned up in bargain bookshops). The first book with the Taschen imprimatur, on Dal, came out in 1985. It was accompanied by a poster bearing the slogan "A genius like me for only pounds 3.95". Buyers found this offer irresistible.

Humour has always taken the place of hype for Taschen; their catalogues feature a system of symbols for easy classification of titles: a moneybag for a potential bestseller, a cigar to indicate "Publisher's Choice", and a curious triangular symbol which signals erotica. Another, less frequently seen, symbol was a cigar with a cross over it and the legend "Sorry, poor book". According to the 1994 catalogue, Japanese Design, Italian Design and the monographs on Delaunay and Klee were "poor books". Perhaps unsurprisingly, this rash display of honesty quickly ceased.

Taschen has now published, he estimates, around 250 titles, of which 120 are in print. Thirty new titles a year is "the most we can manage". What lifts him above being simply a pile 'em high, sell 'em cheap merchant is the weighty, academic stuff, like the forthcoming 2,000-page Monet catalogue, or the books that are a labour of love. How else could you describe the catalogue of the works of Soutine (cigar but no moneybag). "Soutine is one of the very few people in 20th century art who are unknown. From the beginning we thought we can only do it if we put it in the same format as the big names like Picasso and Van Gogh. Soutine was always more of an artists' artist, his reputation has not been big up to the last five or 10 years, but for sure it's my feeling he's one of the most important painters of the century."

Taschen is vague about how he keeps his prices so low: "We begin always by saying that the books as a series will look like this and cost, I don't know, pounds 10, so can we sell so many in such-and-such a time? Which means we usually make the calculation backwards. We have to take care that the price is the lowest we can afford to sell for. Our production in relation to other publishing houses is quite high, because we don't take over licences, we make the whole conception - the writing and so on - ourselves." Company turnover is an obsessively guarded secret (a recent estimate put it at pounds 46m), leading to the suspicion that his profits may be less impressive than his sales figures.

Heading his own company has given him the freedom to start work at noon, collect art and travel widely, but it has not, he says, made him rich. "Rich-minded? Yes. Money, no! I have a lot of books and they can be changed immediately into money if the readers ask for them. If they don't, they remain books. So you never know. I like my paintings, and therefore I am highly materialistic, but I don't care much for attributes which are commonwise specified as being materialistic, like cars."

He shares a "really small" flat with Muthesias and her 16-year-old daughter just around the corner, with his three children visiting at weekends. Taschen was divorced three months ago. "It took a long time; around five years. In England it's much easier for someone in my case. But I'm unfortunately not an Englishman - I'm joking!" Asked if the arrival of Muthesias precipitated the split, he says sombrely. "Yes. But that's maybe too simple as well, because you are only free to meet somebody else if something happened before."

Muthesias came to work for Taschen in 1987, after visiting the Frankfurt bookfair and being entranced by the only stall which wasn't staffed by old gents in half-moon spectacles. Coming from a bookselling family, she was bowled over by this young company, and, later, by its founder. As well as stripping off for publicity photos, Muthesias designs all the covers, has edited books on erotic art, Sixties design and Jeff Koons, and is one of the people Taschen credits with shaping his vision, along with Paris-based critic Gilles Neret, who edited Erotica Universalis. Muthesias, blonde, slim and swanky in black suit and sheer black body with a basque underneath, is unabashed by reactions to "that" photo. "It was not my idea, it was Gilles who said to Benedikt: 'You must be photographed with a naked woman!' And so, it had to be me. There's the feminist complaint, that as a naked woman I am an object. And that's right, you know? I am a very female woman, and Benedikt is a real male, he likes to be the boss. But at the same time, the picture shows our relationship: I am higher than him, like his Muse."

Taschen talks a great deal about "the programme" and it is clear that erotica was always an important part of it. "It was always my obsession or passion since I was juvenile. And so I never had all these inhibitions about erotica or sex - I never understood the difference. I still can't see why people have a problem with the most central aspect of their lives - however you call it - erotic or sexual relations. You can show in movies or TV all kinds of cruelties whatever, but if there is something too naked people get upset. So that's one part of the reason why we have so many nice books and erotica."

Sales of erotica offer an interesting guide to national preoccupations. Some American states took exception to Tom of Finland's sailors with bulging crotches. Britain got sniffy about Jeff Koons's handbook of marital bliss. The Japanese have a problem with pubic hair - perhaps this is why they choke at Cicciolina in the boardroom. Quizzed on this, Taschen grins, "Maybe it's provocative, but that's not the reason we put it there. I believe Koons is a great artist, and that in 10 or 20 years these paintings will have a different standing, like if you see a Lichtenstein today. All these things lose their revolutionary quality after a while, yeah? To me it's just an artwork. An extraordinary artwork, but that's it." As to whether this in-your-face stickiness might put someone off doing business with him, he says philosophically: "People who are in a relationship with us know already that we cannot change our faces. If somebody's not interested in it, that's also OK. We are not missionaries. It's not a must to show everybody." He has several boardrooms, after all.

He is not, he claims, the hardest-working person in the company. "I'm not a big believer in hours per week. It's a question of how effective you can be when you are there, but generally I'm more lazy than hungry for work. For all areas there are better people than me to manage something." Muthesias says: "He's instinctual, he sees the whole thing. When you're editing something you are too close: he can tell you in 10 sentences what's wrong with a book and how to turn it around. He is a wonderful motivator." Right now, though, he's at a bit of a seasonal slump: "It's always the same time, because we have maybe 15 new products and you never know whether they will work or not. That makes me always nervous in August, September, October. Have you seen our diaries?"

He stretches over to the windowsill to show me a copy. All diaries and calendars have his birthday - 10 February - marked with an invitation to send well-wishes to the head office, more a joke than an ego-trip. But Taschen doesn't like the exclamation mark which accompanies the announcement, and works up quite a convincing frenzy as he contemplates it. This is another side to him, the side which admits that some of his staff are "afraid" of him.

Further chat about birthdays and dates elicits the information that he started his publishing company the day before his 19th birthday in 1980, and doing the sum in my head I realise with a shock that the rather hangdog figure before me (though he does have a lovely gappy smile) is only 34. Admittedly he's not a well man today, not to mention under autumnal stress, but I had him down as about 10 years older. All that peering at nudie photographs must be taking its toll. !

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