Sports Direct International is to sell its leasurewear brands in China after inking a GBP20m deal with domestic retailer ITAT Group Limited.

The move will enable the company, which was founded by entrepreneur Mike Ashley, to capitalise on China's fast growing retail market and new opportunities presented by the Olympic Games in Beijing this summer.

Sports Direct will invest up to GBP20m between now and April 2009 to fund store fit-out, working capital and related costs, it said. Operations will be based in Shenzhen, China.

The deal will enable the UK sports chain to sell its brands, which include Dunlop, Lonsdale, Slazenger and Everlast, to larger ITAT's stores.

Its brands will be sold in ITAT's 120 Super Club stores, through a store-in-store concept with an initial selling area of around 250 square metres per store. The sales areas will be staffed by ITAT employees.

ITAT is the largest network of multi-brand apparel stores in China, with over 700 stores in 275 cities.

Dave Forsey, CEO of Sports Direct, said the agreement to work with ITAT in China "offers us an ideal opportunity to access ITAT's fast growing store network, and through it, to be able to offer our brands to the Chinese consumer."

Last month Sports Direct forecast a weakening UK retail environment in 2008, but said it could still exceed its full-year earnings guidance.

It has also agreed to sell its 19% stake in sports brand Umbro, as part of Nike's takeover of the football kit maker, and has offered irrevocable undertakings for a remaining 10% stake.