Peter Stringfellow has made a mint from the industry, and now former contractor John Gray is on a mission to take his chain of lap dancing clubs to the regions. Matthew Richards asked the Californian entrepreneur about how design is key to the clubs' money-making potential
"The job will involve spending several days in an exclusive lap dancing club, enjoying VIP treatment at the expense of the owner." Not your average job description – but all part of the architect's brief Peter Stringfellow provided for the designer of his new club in Paris. The exclusive venue in question was none other than his flagship Cabaret of Angels club in London.

"The Parisians took to my new club like a duck to water," says Stringfellow. He's planning to open a second club in London, and is also eyeing opportunities in Dublin and New York.

But lap dancing is not just taking off in metropolitan hubs such as London and Paris – it is also spreading like wildfire in provincial towns across Britain. That's good news for John Gray, a former construction company owner who gave up building and ended up setting up the Spearmint Rhino chain of lap dancing clubs.

What's more, the adult entertainment boom could provide architects and refurbishment and fit-out specialists with some interesting new clients. Spearmint Rhino plans to open 100 clubs in Britain over the next five years and it spends extravagantly on converting the properties it acquires into clubs. Refurbishment costs vary from £300,000 for a small club to £1m-plus for a large one. Firms that have won work with the chain so far include Renovate and Theam Blueprint Design. Philip Whitehouse, Spearmint Rhino's UK vice-president, says: "We're always looking out for competitive bids."

Gray, a 45-year-old Californian, inherited the family construction business when his father died, and by the age of 22, he was driving a Rolls-Royce. He got into the lap-dancing business by chance. After setting up his own construction company dealing with public works contracts, a friend in the nightclub business persuaded him to finance and build a new club called the Peppermint Elephant: Gray ended up running it himself. A second nightclub, the Spearmint Rhino, followed in 1989. To boost its flagging performance, Gray introduced waitresses wearing bikinis, which attracted so many customers, he even got rid of the bikinis (but not the waitresses). Sales rocketed, and the Spearmint Rhino chain was born.

Two years ago, the Californian spotted a gap in the British market and expanded his chain of clubs here in a blaze of publicity. "In Britain, the strategy is as many clubs as rapidly as possible," says Gray. "We prefer to improve existing premises as opposed to construction from the ground up because it reduces the time required from acquisition to opening to the public."

He takes a hands-on approach to running his business, and plays an active role in the design of his new clubs. "Design is extremely important," says Gray. "Customers who find the clubs' interiors classy, warm, clean and elegant stay longer and thus spend more per visit." And boy, do they spend. Entry to a Spearmint Rhino club costs £15, a dance costs £10 at the bar or £20 in a private booth, and drinks start at £5 a beer. Once the girls have put customers in a generous mood, they've been known to give thousands of pounds in tips. The turnover at Spearmint Rhino's flagship London club on Tottenham Court Road averages £300,000 a week, and Gray claims profit margins "border 50%".

Customers who find the clubs’ interiors classy, clean and elegant stay longer and thus spend more

John Gray, owner, Spearmint Rhino

That kind of profit explains how Spearmint Rhino is able to spend so lavishly on refurbishing its clubs; Gray says refurbishment costs often exceed £150 per square foot. Unlike Stringfellow, he has his own in-house design team in the US, which plans the layout and specifies the materials for new clubs.

Gray says he could run a successful club in any town with a population of 100,000 within a 15-mile radius, providing there is a commercial centre as well as residential areas. It's a claim that Peter Stringfellow disputes. "It's no secret that I'm not a fan of Spearmint Rhino," says Stringfellow. "It brings the back streets of Los Angeles approach to Britain: open a place, put the girls in and hope it's going to work." He says only "the rich, international business crowd" can provide the money to make an upmarket lap dancing club work. Outside the big financial centres such as London and Paris, he says, only downmarket clubs can pull in the punters.

It's still early days, but so far Spearmint Rhino appears to be defying Stringfellow's predictions. Famous customers have included Robbie Williams, Richard Branson and Russell Crowe, and the clubs have become a fixture with businessmen entertaining clients.

Venues have already opened in Harrogate and Bournemouth, and on 5 August Spearmint Rhino will open the world's biggest lap dancing club in Birmingham. The £4m, four-floor venue will have a glass viewing area on the top floor, where VIPs can look down on the 200 dancers entertaining customers below. And Gray also has a wish list of future locations including Aberdeen, Bristol, Cardiff, Hull, Leeds and Milton Keynes.

Gray, a workaholic who often starts work at 5am, seems to be enjoying his success in Britain. Recently, he added a £1m Buckinghamshire mansion to his international string of properties, which he flies to in his private jet.

Design a club the Peter Stringfellow way

“You can’t make just any venue work – you need to look at the history of the place. There’s a place around the corner from my club in London that’s opened and closed as six different restaurants in the last few years; the space just isn’t right. You’ve got to look for the magic of the room. (We call clubs ‘rooms’ in this business.) I can see a space for a club – that’s the way my brain works. “In the 1960s, clubs were small and intimate, such as Tramp and Bag of Nails, which was my favourite. In the 1970s, when I opened Cinderella’s in Leeds, I introduced the idea of a dance floor and a stage with seats around the edge – it was getting back to the idea of a ballroom. In the 1980s, people wanted to be seen – celebrities wanted to be noticed when they walked in. “I opened Stringfellows in London, which had the longest bar in London at the time. The disco room was pure 1980s disco, with leather seats supplied by Cadillac and a small stage for a piano. “But now, there’s a big turn back to intimate clubs again – that’s why you have so many members’ clubs. You have to have a clear view of what you want to happen in that room. I can walk into a club and say, ‘this is a designers’ club – it wasn’t designed by the owner’. The ideal club is designed by the owner collaborating with a designer, where the owner takes some of the responsibility, but 90% are not like that. “The designer for my new lap dancing club is Frisbee Fox; she’s very talented and very theatrical, just like my clubs. If a lap dancing club looks bad, it will attract the wrong sort of girls. If you open a lap dancing club with six or 10 girls, then it will be a pathetic club. If you don’t have top girls there, it doesn’t work. I’m only comfortable with top-line girls.”