ITOCHU Corporation has concluded an agreement with the French firm Lollipops S.A. for exclusive import and sales, in connection with the Lollipops brand's new development in Japan. We intend to launch this business in the spring/summer season 2007 with Elite Co., Ltd. serving as the sole sales agent.

Lollipops was established in 1994 by Marjorie Mathieu and Yann Ducarouge, for the purpose of making an approach to creation of fashionable accessories that enhance apparel.
Like dainty cherries topping cakes, Lollipops's bags and accessories add precious touches of delight and femininity, and have found smoothly expanding sales since the opening of the first shop in 1999. With its philosophy dedicated to constant creation of innovative designs and fabrics, Lollipops caused a sensation in Paris. And now, it is broadening its aim from France to other markets around the world.

The outstanding features of Lollipops products may be summarized in the following three points: 1) the effect of its bags and accessories as fashion accents for women; 2) on-going creation of imaginative new designs, colors, and fabrics; and 3) affordable prices making the brand accessible to a wide circle of consumers. Lollipops has even been said to have no competitors because so many of its original bags, scarves, hats, waistbelts, and shoes are available at reasonable prices.

Aware that the popularity of imported items in the Japanese market for bags is again rising these days, ITOCHU Corporation focused on the Lollipops brand in light of its pronounced trendiness in the fashion aspect and its reasonable prices, and decided to embark on this business. We will carry out all brand management activities, i.e., image-shaping through advertising and other means, and construction of sales channels.

As of August 2006, Lollipops stores inside and outside France (both those run by the company itself and franchise operations) numbered 70.
In the Japanese market, we are planning to sell Lollipops products at a total of 29 Marui and Fit House stores, and intend to initiate sales in late January or early February 2007. We are targeting sales of 300 million yen in the first year and 1 billion yen in 2010, three years later.