Thee Dollhouse has new owner

A Colorado adult entertainment company has purchased Raleigh-based Regale Inc., parent company of Thee Dollhouse, for about $10.1 million and plans to change the strip club's name.

VCG Holding Corp. owns 12 adult nightclubs and a dance lounge in Indianapolis, St. Louis, Denver, Colorado Springs and Louisville. The publicly traded company is betting that its first location in this market will be a moneymaker.

In a prepared statement Tuesday, VCG said it expects Thee DollHouse to bring in $6.45 million in gross revenue and $3 million in pretax profit annually.

The club, which opened in 1992, was the only topless club to win approval from the city of Raleigh for 15 years and has benefited from its prominent location, visible from the Beltline.

"We are pleased to have acquired such a great location with close to 50 percent pretax margins," VCG chief executive Troy Lowrie said in the statement.

VCG will change the location's name to "The Men's Club," but it's not clear when that will happen. Calls to VCG officials and Dollhouse president Stephen Barry Sandman were not returned Tuesday.

There are Men's Club locations in Dallas, Houston, Charlotte, Mexico City and Guadalajara.

Since it began operating in 2002, Denver-based VCG has acquired seven adult nightclubs.

But that has put the company on shaky financial ground. VCG's liabilities at the end of 2006 exceeded its assets by $300,000, according to a company filing with the Securities and Exchange Commission.

VCG also disclosed that it has received a warning letter from the American Stock Exchange that it was not in compliance with some listing standards.

VCG announced Tuesday that it paid $10.1 million cash for Regale. The deal included 9,747 shares of VCG common stock. The company's stock closed up 7 cents Tuesday, at $8.37.