Michael Kors has sued Costco alleging that the mega-retailer has used images of high-end Kors handbags with an advertised price of $99 reports the Associated Press. Kors accuses Costco of “bait-and-switch” stating they have no agreement in place to make these bags available for sale, and that the bags in question would have been significantly more expensive than the advertised price.
Costco has already drawn ire from Tiffany on similar allegations. As Costco carries ever more high-end brands in a bid to attract middle market consumers to re-purposed upmarket solutions Costco has allegedly allowed their marketing departments reign to advertise where it might not be welcome.
There are mixed emotions in the industry about associating brands with discount retailers and the outcome of these cases will certainly be telling as to whether Costco has begun to overreach. According to reports Kors may claim damages from sales erosion at their retail stores.