Berthold Albrecht: Aldi heir who helped build the company's position of global dominance
Wednesday 19 December 2012
Berthold Albrecht was one of Germany's and Europe's richest men and the billionaire co-owner of the Aldi discount supermarket empire. His death was announced on 9 December in a statement released by the notoriously reclusive family the month after a private burial. No cause of death was given. His wife declared: "Berthold was a very loving and extremely generous human being, an exemplary husband and father." She also described him as a "fighter, never losing hope right to the end," suggesting that he had been ill for some time.
Berthold, born in 1954, was the son of Aldi's co-founder Theo Albrecht Snr, who died in 2010 at the age of 88. Berthold grew up under his father's wing, learning the business and eventually taking over the running of the company with his brother, Theo Jnr.
Aldi's achievements are seen as one of Germany's greatest economic success stories. Theo Snr and his brother Karl turned their mother's corner shop in Essen into the no-frills Aldi Empire, which currently extends to over 10,000 stores worldwide and in 2010 placed the brothers on Forbes' rich list with a combined fortune of over $40bn (£26.7bn), exceeded only by those of Bill Gates, Warren Buffett and the Mexican Carlos Slim.
The key to Aldi's success was its devotion to cost-cutting, allowing it to sell a limited assortment of goods at bargain prices with minimal advertising costs. Aldi's thrifty ways were a reflection of its founders' personalities with neither brother flaunting his wealth; at board meetings Theo Snr was renowned for taking notes with pencil stubs rather than an executive fountain pen.
After the Second World War, out of necessity they had sold only a small number of essential items, while experimenting with a no-frills self-service format. The goods were not displayed on shelves but in cardboard boxes stacked on wooden pallets. Within a decade, as Germany's economic recovery gathered momentum, they owned more than 100 stores. By 1961, the retail chain was formally given the name Aldi, a contraction of "Albrecht discount".
Aldi stuck to its motto of "best quality, lowest price". Its operations were run with military discipline and attention to detail, and in such secrecy that Aldi managers were forbidden not only to talk to the press, but even to colleagues in other districts. The company grew to become a global phenomenon by spending almost nothing on advertising and by simplifying its inventory, stocking only a fraction of the products featured in regular supermarkets. Customers pay extra for plastic bags in which they pack their own groceries, which keeps staff numbers down. The stores are generally small and spartan, and to maximise efficiency often have unlisted telephone numbers so employees are not interrupted. The German stores were so dominant that not even the US discount giant Walmart could compete, and withdrew from Germany in 2006.
In 1961, following a disagreement on whether to sell cigarettes, the brothers divided their business into two operations within Germany, Theo running Aldi Nord, and Karl Aldi Süd. As the brand continued to grow, the brothers divvied up the globe; Karl got the rights to Australia, US and UK, where there are now over 400 stores in operation. Aged 92, he is ranked by Forbes as the richest man in Germany with a fortune of £15.6bn.
In 1979, Theo Sr purchased the American discount gourmet retailer Trader Joe's, the supermarket chain that recently saw off its main rival, Tesco's Fresh & Easy. With his death in 2010, Berthold and Theo Jr took full control of Aldi Nord with 50 per cent each. Both brothers served on the firm's supervisory board and Berthold was chairman of one of the family foundations which hold the shares.
In 1993, the family started appointing outside managers and took a back seat from day-to-day operations. However, Berthold, who is credited with the company's success in the lucrative US market, was said to have brought a forward-thinking strategy to the company's management. As a result, with the reins of power having already been handed over to new managers, Berthold's death is unlikely to have any significant impact on the company, with, a statement said, "no change to the operational business."
Neither Aldi Nord nor Aldi Süd publishes company accounts, but according to the trade information service Planet Retail, the two companies had an estimated global turnover of €58bn (£47bn) in 2011. Berthold was believed to have a personal fortune of £6.7bn, according to the Bloomberg Billionaires Index. Little is known about the Albrecht family except their obsession with privacy; they live behind fortress-like security on estates overlooking the Ruhr valley, maintaining an almost total media black-out with only a handful of photographs of the male members in existence. Their reputation for reclusiveness is part of German business folklore.
Their seclusion perhaps stems back to 1971 following Theo Snr's kidnapping. He was held for 17 days and the family paid the equivalent of £2.3m for his release. However, it later emerged that the ever-frugal Theo had himself negotiated the ransom. He then went to court to have the ransom classified as a tax-deductible business expense. Thereafter, he never spoke to the media again and the family have since gone to great lengths to avoid being photographed.
Berthold is survived by his wife Babette and their five children, including quadruplets born in 1990.
Berthold Albrecht, businessman: born Essen, Germany 14 August 1954; married Babette (five children); died Essen 21 November 2012.
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