ITOCHU Corporation and Sanrio Co., Ltd. (headquartered in Shinagawa-ku, Tokyo; Shintaro Tsuji, President; hereinafter referred to as Sanrio) have concluded a three-year merchandise-licensing contract for the products utilizing the designs of characters appearing in "Hello Kitty Stump Village," the DVD series produced by Sanrio. We are going to commence development of products through our seven sublicensees in nine categories starting with the 2007 spring and summer collection.

"Hello Kitty Stump Village" is a series of clay animation features produced by Sanrio in collaboration with a Korean firm in 2006 for worldwide release. It is based on stories with simultaneous appearances by several beloved characters (such as Hello Kitty, My Melody, Little Twin Stars Kiki and Lala, Bad Badtz-Maru, Pom Pom Purin, and Kero Kero Keroppi). Each installment lasts about nine minutes, and is a heart-warming episode complete in itself. Tohokushinsha Film Corporation (headquartered in Minato-ku, Tokyo; Hiroshi Hayashida, President) is scheduled to launch sales of the Japanese version of the DVD series in 26 installments on five disks, on April 25 of this year. The Japanese model SHIHO will handle the narration chores for the first time.

ITOCHU is going to commercialize products with the Stump Village design based on the animation series. The products will feature pleasing patterns depicting several Sanrio characters together, pop designs, and a three-dimensional look that is based on the first clay animation by Sanrio. The plans envision a freshness and appeal deriving from designs that convey all the fun and warmth generated by the DVD characters, which are popular among a wide range of age groups, from toddlers to adults. The products are to be sold mainly through major mass-merchandise stores and specialty shops across the country. The plans are targeting annual sales on the order of 1.5 billion yen (on the retail price basis) three years later. The table below shows the sublicensees and the items to be handled by each.