LD Europe Ltd., which operates as Lovedoll UK, was allowing customers a firsthand experience of its products using a bedroom on its premises.
Authorities visited the company's premises following complaints it was running a sex-doll brothel and were taken to a showroom and a bedroom.
They said that the dolls, which cost about £2,000 at the store, were also offered as a try-before-you-buy option for £50.
That practice would require a sex establishment license, which the company did not have, according to a complaint.
On Tuesday, the company's owner, Graeme Tulip, was fined £10,000 in absentia at Gateshead Magistrates Court.
Sex establishment licenses in the U.K. cover premises selling sex toys, books or videos, venues where explicit films are shown to members of the public and those where sexual entertainment, such as strip shows, takes place.
