Lululemon accuses Costco of selling ‘unauthorized’ versions of its $128 pants

Lululemon is suing Costco, alleging that the discount wholesaler is selling knockoffs of its $128 pants and other pricey athleisure clothing.

In a lawsuit filed Friday, Lululemon said Costco has “unlawfully traded” on the athleisure brand’s “reputation, goodwill and sweat equity by selling unauthorized and unlicensed apparel employing knockoff, infringing versions” of its products.

Specifically, the Vancouver-based athletic apparel maker says Costco’s private-label line Kirkland is selling similar pants, hoodies and jackets at a fraction of the price. The company accuses Costco of leading customers into believing that the Kirkland-branded “dupes are in fact manufactured by the authentic supplier of the ‘original’ products.”

In the 49-page lawsuit filed in California, Lululemon shows the alleged design similarities of its products with Costco’s, as well as the price differences. One example in the lawsuit is that Lululemon sells a Scuba hoodie for $118, while a Costco version sells for 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.