By Paul Singer
The Associated Press

CLEVELAND - Penthouse magazine plans to license a chain of upscale strip clubs around the country, hoping to cash in on its well-known name by offering traditional bump and grind in a velvet wrapping.

The first Penthouse Key Club had its grand opening Wednesday in Cleveland, and the second will open today in Dallas. Penthouse consultant David "Slim" Baucom said he expects to sign up about two dozen strip clubs nationwide over the next two years.

The Penthouse plan is to open luxurious clubs with food and drink that cater to women and couples as well as men and that add polish to the image of a seedy strip club with plastic seats and watered-down drinks. "These will be places where you can go and have dinner," said Penthouse spokeswoman Dottie Meyer. "A higher caliber of girls will be dancing, and it will be a more living-room type atmosphere."

The clubs are an attempt by parent company General Media Communications Inc. to extend the Penthouse brand beyond the sagging magazine. Circulation is down from a high of 5 million to less than 1 million.

The Cleveland club is in a building that has been a strip club for two decades. Last known as Circus in the Flats, it occupies an old warehouse in the city's nightclub district along the Cuyahoga River.

Owner Tim Spencer said he spent $1.5 million renovating the club, which now has a lavish mirrored entry hall with velvet upholstered stone benches and murals of Greek statues - topless.

The dining areas feature leather booths and wood paneling, clean carpet and the cigar smoky smell of a trendy bar. Patrons can choose from some of the world's top champagnes and cognacs, though the primary drink is beer on tap.

Mr. Spencer said his club had gotten stale, and partnering with Penthouse brings a new mystique.

"You have an internationally known name," Mr. Spencer said. "It's known for sex and it's known for quality and we want to carry that same theme.

"Every now and then, you've got to change your clothes."

Since Ohio law prohibits nude entertainment in places that serve alcohol, the club has a topless bar at one end of the entry hall and a liquor-free "Forum Room" at the other end, where women dance naked.