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Sep 12, 2017  
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Costco Tiffany rings - Business Insider

Michael Kors This isn't the first time Costco has been accused of falsely marketing designer products. In 2013, Michael Kors sued Costco for allegedly advertising the designer's handbags without being authorized to sell them. According to the lawsuit, Costco advertised $99 Michael Kors handbags, but did not actually stock the bags in stores (and was not authorized to do so). The companies settled the case out of court in 2014.  Costco isn't authorized to sell Michael Kors handbags — but the retailer reportedly advertised the bags in 2013. Facebook/Michael Kors Costco also has a history of selling what Refinery 29 calls "gray market goods" — designer items that were obtained through channels that aren't illegal, but that are unintended by the original makers. Aspirational designer brands like Michael Kors and Ralph Lauren don't want to be linked to Costco, but some of their items end up sold there nonetheless.  Designer brands "may have an abundance of fabric, or fabric may have come in that didn’t meet their standards," Marshall Cohen, chief industry analyst at The NPD Group, told Refinery 29. "They can’t sell it openly on the off-price market, so they sell it to the warehouse stores." Costco did not immediately respond to Business Insider's request for comment on its design brand strategy. In addition to legal questions, Costco's designer brand business is in also in danger due to consumers' growing disinterest with once aspirational brands. The rise of fast fashion and the decline of retailers like Macy's and Sears has hit designer brands like Michael Kors and Ralph Lauren hard. Customers who once would have hunted for deals on these brands are increasingly saving money by buying less expensive private label items instead, such as Costco's Kirkland brand.

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