Hustler is staying in Birmingham, investing £10 million into its UK business, and rolling out six new stores by next February, its UK managing director said yesterday.
Andrew Joseph quashed rumours that the sex store was pulling out of the UK market and said the Birmingham and London branches would re-open this Friday following a re-fit.
However, he admitted they had lost money from unsuccessful ranges and will be reinvesting in products exclusively for the UK.
"Our mistake was to assume that our US offering would transfer to the UK, but that has not been the case," he said.
The new UK range features a greater choice of menswear and more fitted clothing for women.
Hustler has also introduced a winter range of branded tracksuits and hooded tops. Popular ranges such as branded lingerie and vibrators will remain.
The six new stores - which are still subject to approval by Hustler Hollywood US - are planned for Cardiff, Newcastle, Manchester, Leeds, Glasgow and Camden, London.
Mr Joseph said he hoped all six would be open in time for Valentine's Day 2006 .
Branches for Nottingham and Sheffield are also planned for August next year.
Although Mr Joseph would not put a figure on the chain's losses, they are thought to run into six figures - a substantial proportion of the £ 8 million initial investment.
However, with new investment and support from the Flynt family's US porn empire, Hustler UK said it was now ready to begin taking market share from its rivals.