Lululemon is suing Costco, alleging that the discount wholesaler is selling knockoffs of its $128 pants and other pricey athleisure clothing.
Lululemon has filed a lawsuit against Costco, accusing the retailer of illegally exploiting the athleisure brand’s “reputation, goodwill and sweat equity” by offering unauthorized and counterfeit apparel that resembles its products.
The Vancouver-based company specifically points to Costco’s Kirkland line, which is selling similar pants, hoodies, and jackets at significantly reduced prices. Lululemon claims that this leads customers to believe the Kirkland items are actually made by the authentic producer of the original merchandise.
In its 49-page lawsuit filed in California, Lululemon illustrates the alleged design resemblances and price discrepancies between its own offerings and those of Costco. For instance, a Lululemon Scuba hoodie retails for $118, whereas a similar item at Costco is priced at about $8.
Costco didn’t immediately respond to CNN’s request for comment.
In a statement to CNN, Lululemon said as “an innovation-led company that invests significantly in the research, development, and design of our products, we take the responsibility of protecting and enforcing our intellectual property rights very seriously and pursue the appropriate legal action when necessary.”
Lululemon said that “one of the purposes of selling ‘dupes’ is to confuse consumers … into believing that the ‘dupes’ are (Lululemon’s) authentic products when they are not.”
Lululemon is seeking to “recover fully” the financial losses by seeking an unspecified amount of monetary damages as well as asking a court to demand that Costco to stop selling these products.
The retailer has sued others before. In 2021, Lululemon sued Peloton for allegedly making similar-looking apparel. Two years later, the companies patched up their relationship and partnered to sell branded clothing.
Lululemon recently cut its full-year guidance citing a “dynamic macroenvironment” that includes a decline in visits to its US stores, the impact of tariffs and rising competition from other brands, such as Vuori and Alo.
Shares of Lululemon (LULU) are down 37% for the year.
