In recent years, Costco’s versions of pricey athleisure have gone viral, raising the retailer’s profile among budget-conscious but style-minded consumers.
Kirkland Signature buyers routinely turn to TikTok and other social media outposts to point out products’ striking similarities to brands such as Vuori, Ugg, and Aritzia.
Lululemon, best known for its buttery-soft leggings and viral belt bags, operates 770 stores worldwide.
It reported US$10.6 billion ($17.4b) in net revenue last year, a 10% increase year over year.
Its growth has been driven largely by international customers, as stiffer domestic competition and more discerning customers led to weaker growth in the US, analysts said.
In its 49-page lawsuit, Lululemon alleges Costco sold items made with patent-protected designs for about half a dozen pieces of apparel under the labels Danskin, Jockey, Spyder, and Kirkland Signature.
The Costco products are a fraction of the price: The Danskin women’s half-zip hoodie retails for less than US$20, compared with US$118 for Lululemon’s Scuba half-zip hoodie. (The lawsuit cites a January 25 article published in the Washington Post regarding Costco’s dupes.)
Because many Kirkland-labelled products are produced by name-brand companies, some consumers may assume that Lululemon is the maker of the look-alike products, the apparel company contends, but the warehouse club does nothing to dispel those perceptions.
By omission, the Issaquah, Washington-based chain is “likely to continue to cause confusion, mistake, and deception among consumers” as to the source or affiliation of its products, the lawsuit alleges.
Lululemon, which is based about 240km north in Vancouver, British Columbia, wants Costco to stop selling, importing, distributing, advertising and marketing the products.
Other brands have also filed lawsuits over product dupes.
Deckers, which owns Ugg, filed a federal lawsuit against Costco in May over its Kirkland Signature unisex shearling slipper, which resembles the Ugg Tasman.
Last year, American Eagle sued Amazon, alleging the online retailer sold dupes of its Aerie sweatshirts and workout shorts, labelling the product with a brand name spelled slightly differently. (Amazon founder Jeff Bezos owns the Washington Post.)
Tapestry, the parent company of handbag brand Coach, sued Shein in March for allegedly designing, manufacturing and selling dupes with the brand’s signature “C” logo.
Costco, which has about 900 locations worldwide, reported US$249.6b in sales during its last fiscal year, which ended in September.
That is a 5% increase year over year. The wholesale chain has continued to dominate in the grocery space as consumers look for value in their household staples.
