Lululemon Sues Costco: High-End Fashion Fights Back Against Budget Dupes

In June 2025, a legal battle unfolded that may have far-reaching consequences for the retail industry. Lululemon Athletica, the high-end athletic apparel company known for its premium leggings, jackets, and yoga gear, filed a lawsuit against Costco Wholesale Corporation. The reason? Lululemon claims that Costco is selling unauthorized knockoffs of its signature designs under the guise of affordability.

This isn't just about a couple of hoodies—it’s a fight over intellectual property, brand reputation, and the delicate balance between affordability and authenticity in modern fashion.

Background: The Rise of the “Dupe” Culture

In recent years, the fashion world has seen a growing trend known as “dupe culture”—a movement where consumers intentionally seek cheaper versions of luxury items. From TikTok hauls to YouTube reviews, influencers proudly showcase “dupes” of everything from handbags to activewear.

While it may benefit budget-conscious shoppers, this movement poses a significant threat to brands that invest heavily in design, materials, and marketing. Lululemon, which built its brand on innovation and exclusivity, sees Costco’s alleged knockoffs as a direct assault on its identity.

The Allegations

Filed in the U.S. District Court for the Central District of California on June 27, 2025, the 49-page complaint accuses Costco of selling lookalike products that closely resemble Lululemon’s iconic apparel—including its:

Scuba hoodies

Define jackets

ABC men’s pants

These items, sold under Costco’s private-label brand “Kirkland” and others such as Danskin and Spyder, are said to mimic Lululemon’s patented designs, stitching, fit, and feel—without any licensing or approval from the brand.

Lululemon claims that the similarities are so strong, consumers may believe the products are either authentic or endorsed by the company, thereby damaging its brand reputation and potentially cutting into its market share.

Legal Arguments

Lululemon is seeking a jury trial, as well as:

An injunction preventing Costco from selling, marketing, or distributing the infringing items

The removal of all promotional materials tied to the allegedly copied designs

Monetary damages for lost profits and harm to brand value

The lawsuit cites copyright infringement, design patent violations, and trademark dilution, arguing that Costco deliberately tried to profit off Lululemon’s established market position.

Before filing suit, Lululemon had reportedly sent cease-and-desist letters to Costco, demanding the removal of the infringing products—letters that were allegedly ignored.

Why This Matters

This case highlights the growing tension between premium brands and big-box retailers that cater to a broader, more cost-conscious consumer base. In an age where inflation continues to impact household budgets, retailers like Costco provide lower-cost alternatives that appeal to the average shopper.

However, when these alternatives cross into the territory of unauthorized imitation, the line between accessibility and infringement becomes blurred.

If Lululemon wins the case, it could set a powerful legal precedent for other luxury or premium brands to follow suit against retailers offering similar lookalikes. It would also force retailers to re-evaluate the designs they sell and possibly shift away from copying recognizable styles too closely.

The Business Angle

Lululemon has worked hard to position itself as a status brand in the athletic apparel space. From its limited-edition releases to collaborations and high-end pricing, the brand banks on its exclusivity. By contrast, Costco operates on a volume-based discount model, offering affordable items at scale.

This lawsuit reflects a larger cultural and business divide: exclusivity versus accessibility. Lululemon argues that its creative investments, including design and fabric technology, are being undermined by imitation. Costco, meanwhile, has yet to respond publicly, but will likely argue that the garments are generic in design and not direct copies.