Complex sentence: On occasion, special contests run in association with various sponsors, known as Loves Threadless, set a theme for designs, with a selection of additional prizes being awarded to the chosen winner, often including prizes related to the sponsor.
Split into simpler sentences: On occasion, special contests--known as Loves Threadless--run in association with various sponsors. These contests set a theme for designs, with a selection of additional prizes being awarded to the chosen winner; special prizes often relate to the sponsor.