27/07/2005 - FRALY

Trevignano (Treviso)/Ponteranica (Bergamo, Italy), 27 July 2005.- Lotto Sport Italia, the Italian sportswear company, is proceeding with its strategy of expanding its brand into other sectors. In fact it is announced officially today it has renewed the licensing agreement with Fraly for the manufacture and distribution of sports underwear collections under the Lotto brand.

The collaboration between these two companies is to continue for a further 5 years, until December 2009, and will mainly apply to the European area.

Under the terms of the renewed agreement, Fraly of Bergamo will continue to manufacture and distribute sports-style underwear for men and women, further developing their research into the design of high quality items. These underwear collections, too, will be marked by the most refined Italian taste, from design to the choice of fabrics whose technical characteristics and performance are typical of sportswear brands.

After a first phase in distribution that has seen the company mainly concentrating on the Italian market, from this year Fraly expects to expand in other countries: the next target will be the extension within the European market, with the help, in some countries, of sales synergy with Lotto Sport Italia.

The relations between Lotto Sport Italia and Fraly, a company with consolidated experience in the field of underwear of high quality both in technique and design, began in 1999. Since then the turnover generated by the licensing agreement has grown at a high rate (700% more in 2004 than in 2000), the total in 2004 being about 2.2 million euro.

Apart from underwear, the Lotto Sport Italia have current licensing agreements in stationery and - an addition this year - in cosmetics. These agreements make up 2% (6 million euro) of the company's total turnover.