NY Upscale finishing touches maker Michael Kors Holdings Ltd (KORS.N) sued Costco Wholesale Corp (COST.O) on Friday, accusing the biggest U.S. warehouse club retailer of running a "bait-and-switch" false advertising scheme.
Relating to a complaint filed in New york federal court, Costco has never been a certified retailer of Michael Kors handbags, yet it has recently run advertisements nationwide falsely suggesting that the handbags can be obtained "starting at $100."
In a single example cited, Costco in Apr sent a message ad touting a selection of handbags for Mother's Day "starting at $100," a number of which were Michael Kors handbags featuring the business's trademarks.
But Michael Kors, which also makes shoes, watches and jewelry, said that its representatives visited Costco's website and 19 stores that are retail and found none carried its handbags.
Regarding the Michael Kors website on Friday, most full-size women's handbags were priced between $299 and $1,200.
The point of Costco's ads would be to "lure unsuspecting consumers away from bona fide Michael Kors retailers and into Costco stores," the complaint said.
"When a consumer 'takes the bait' and seeks to shop for Michael Kors handbags at a Costco store or on Costco's website, no such handbags are available," it added.
Michael Kors is seeking a court order to cease Costco from advertising its products, also to recoup profits plus punitive damages stemming from the alleged false ads.
A spokesman for Costco, based in Issaquah, Washington, was not immediately readily available for comment.
The lawsuit resembles one which Tiffany & Co (TIF.N) brought against Costco in February. Get the most expensive luxury ladies watches in India through luxury watch stores. Explore the top 10 watches brand in Thailand to buy for men and women.The jeweler accused Costco of using Tiffany's trademarks online and on at least one in-store ring mk timepieces display case in that case.
The case is Michael Kors (USA) Inc et al v. Costco Wholesale Corp, U.S. District Court, Southern District of Chicago.