An impressive cast of high-level sports and retail executives has teamed up to form USG Sports, a new company in Shanghai resulting from the merger of four large-scale sports retailers operating over 3,000 stores in 22 provinces. Although USG Sports may not be the largest in terms of size, it describes itself as one of China’s largest retailers and the country’s leading player in terms of product offerings and service levels.

The merger has been backed financially by United in Sports, a European private equity fund focusing on the sports business and led by Robert Louis-Dreyfus, the wealthy and well-known former chief executive and shareholder of Adidas. Its Chinese partner is Sandrine Zerbib, the forceful French woman who built up Adidas China and headed it until last year. She has been appointed as the chairwoman of the board of USG Sports.

The chief executive of the new retail company is Dan Loeb, who ran Nike China until early 2005. After a short stint as general manager of Nike UK, Loeb was appointed as general manager of the fast-growing Nike Central Europe, Middle East and Africa region (CEMEA) unit, which includes Russia, but he quit last September.

Other executives in USG Sports’ line-up include Mike Wilkes, former vice president and general marketing manager at Dick’s Sporting Goods, who has taken up the same position at USG Sports. The vice president for retail operations is Luke Luang, who spent the last 11 years with Wal-Mart. Vincent Choo will leave Yum! Brands after 25 years to join USG Sports as vice president for real estate and development.

The merger is a tie-up between Shanghai Rui Li, Shenyang Peng Da, Sichuan Jin Lang and Shenzhen Ling Pao, four Chinese companies that trade under many different formats – from large multi-brand stores to mono-brand outlets for Nike, Adidas, Li Ning, Puma, Umbro and many more. Coming just over two months before the opening of the Beijing Olympics, the deal is meant to provide a wide platform for international brands seeking to penetrate the Chinese sports market, set to become the second-largest in the world. For the time being, only about 100 of the outlets operated by USG Sports are multi-brand sports stores, but they will be more in the future.

USG Sports estimates that China’s sports footwear and apparel market was worth about $5 billion at the retail level in 2008, excluding cheaper brands and retailers. The four merged networks make up more than 20 percent of this business, and they are growing faster than the market, which is expected to expand by more than 35 percent this year. The retail group intends to more than double and perhaps triple in size over the next five years.

Beyond size, however, the concept behind the merger is to invest further in quality sports retailing, which is often lacking in China. The level of the management team speaks for itself, but the company will invest heavily in many other aspects to improve the shopping environment and performance of the stores, from logistics to information technology systems, product mix and staff training.