Citizens of Humanity Suing Costco

June 10th, 2009 · 10 Comments

Depending on how knowledgeable about high end (over priced) jean makers you are, you may or may not know who Citizens of Humanity actually is.  Or, perhaps the only place you have ever actually seen their jeans, much like me, is in Costco.  Nonetheless, they are suing Costco for ruining their reputation; ‘goodwill’ in legal terms.

Here’s kind of the brief, sketchy version, as far as I understand it.  Citizens of Humanity makes jeans for men and women that retail quite high, like $200.00 – $300.00 high, at stores such as Barney’s, Nordstrom’s, and high end clothing boutiques.  Costco purchased a large enough shipment of their jeans from a third-party distributor to sell at their stores.  I’ve read several blog posts about people spotting them at their Costco’s and I know that I saw them at one too.  Anyway, at Costco they were selling for $104.99.  Clearly, the price discrepancy is sizable.  So, Citizens of Humanity requested that Costco tell them who they purchased the jeans from and when Costco wouldn’t, they sued.  So, the original judge said ‘no’ to the whole thing, but on appeal, the California Appellate court allowed them to kind of work the legal system to say that Costco was selling stolen goods; that must be it since they wouldn’t say where they got the jeans.  Costco says telling this is one of their trade secrets.  So, the case goes on.  You can read the rather dry ruling online (yes, it is your lucky day).  However, if you’d like to read a law professor’s summary of what the ruling actually says, which is more interesting, you can find that online too.  His take is that they are saying Costco is selling stolen goods as a way of gaining access to the name of the distributor via discovery.

So, I think this whole suit is kind of ridiculous for several reasons, not the least of which is that I don’t think they’re suing all retailers that have low prices on their jeans or that are maybe not up to their high standards.  For instance, I’ve read in forums online that you can also buy the jeans at TJ Maxx, which seems lower end than Costco to me.  And they are selling them at an online place called ‘shopbop.com’ that probably isn’t exactly in the Barney’s league either.  Not to mention, you can buy them at Barney’s online for below $200.00 and some of them are even on sale for as little as $69.00.  Though, I’m sure those are last season’s and no one would be caught dead in them. :-)

Okay, I’ve got to admit I scoff a little at things like this because I think, that much money for a pair of jeans seems like thievery. They don’t look that spectualarly worth it to me.  But I don’t buy a lot of jeans and I definitely don’t buy jeans for that much money.  I can freely admit that I am not completely super fashionable, or any kind of fashionable probably at all.  Of course, I get that it is hard to find a comfortable pair of jeans and if these fit you perfectly, and you wear them often, the price isn’t so bad; assuming they don’t fall apart after a couple of washings.  However, I also think that if other very high end or exclusive brands such as Cartier, Kate Spade, Coach, Waterford, Rado, Chopard, or Niman Ranch are sold at Costco, these people making jeans shouldn’t be so disgusted by the company they might be keeping in the Costco warehouse.  Perhaps they should just be glad that their product is being given a wider audience and may attract more buyers via this new outlet of sale.

Share

Tags: Clothing · Costco in Blogs · In the News Share

10 Responses so far ↓

  1. 1 DennyHayes // 2010.09.10 at 5:32 pm

    What is really interesting here is that the laws in the US are created by congress, and they change daily, based on what is called case history. That is because no two people can get different penalties for the same crime. So if CostCo wins this case they have established case history supporting not giving out information about where they purchase their merchandise. That can have a big effect on sales such as Ebay making vendors who sell items on their site prove where they purchased them. In the past Ebay has used that technique to try to stop people from selling knockoffs on their web site, even though there is so much pirated merchandise on Ebay, that it is kind of a joke. It is interesting that when small individuals are required to show proof of things that big business is not required to do..

  2. 2 Susan // 2009.12.15 at 5:43 pm

    I found this thread from a google search of “Citizens of Humanity jeans that fall apart.” Re: Jenn – I paid $207 for a pair and they fell apart after 3 days of light wear, no washing. I feel like I’ve learned my lesson – paying more for jeans doesn’t necessarily mean you’re buying something that will last. From now on I’ll be buying lower end jeans, and not feeling like such a sucker when they start falling apart.

  3. 3 Maker of the Chi Straightening Iron Suing Costco | Addicted To Costco! // 2009.11.03 at 8:16 am

    […] The other thing that is claimed in the lawsuit, is that Costco is selling counterfeit Chis.  According to Farouk, there have been counterfeit Chis sold in Texas and California.  However, I’m not sure that I’d totally believe that, mostly because this is a bit of a legal ploy.  If you’re not familiar with how these suits work, the manufacturer’s say that Costco is supplying counterfeit goods so that they can find out who provided the products to Costco.  And that means that they can then go after the ‘weak link’ in their distribution chain and punish them.  If they don’t claim counterfeit items are being sold at Costco, then Costco can protect the source that they got the items from as a trade secret.  This is similar to some of the other suits that various manufacturer’s have brought against Costco, including the Citizens of Humanity jeans thing. […]

  4. 4 jenn // 2009.09.24 at 7:02 pm

    i just wanted to set some things straight since those who have commented obviously have no idea what they are talking about.

    a) the jeans do not all cost upward of $200. while there are some specialty ones (ie, those with crystal embelishment or extra hardware) that cost above $100, most are between 150 and 200.

    b) they do not all have a 34 inch inseam. the dita petite cut is for shorter women and i, at 5 feet tall, did not have to have them hemmed.

    c) these are not the same jeans you get at old navy. while i understand how one would scoff at buying jeans that cost more when you could pay less, there is a huge difference in quality. premium denim has a longer life due to the fact that it has more stitches per square inch and the seams are double stitched. this means they will not stretch out and change fit over time (so when you are replacing your cheaper jeans yet again, spending more money again, a premium pair would still be holding up). the fits are considerably better as well.

    further, as a retailer who sells citizens for humanity, i can tell you that 104 (the costco price) is ridiculously close to the wholesale price, so obviously whoever sold those took a huge loss.

    you get what you pay for and a wardrobe staple is something worth investing in. you all can keep buying cheap jeans that wear out and have an unflattering fit. im going to spend the extra dough on something that lasts.

  5. 5 Clue // 2009.06.17 at 2:44 pm

    This has become a huge issue in retail. All kinds of companies are doing this now, from personal care products, to makeup to shoes, to toys, to handbags, etc. This has become increasingly commonplace after a July 2007 court ruling that effectively overturned a 1911 ruling which banned on manufacturers form price fixing and punishing retailers for selling at prices less than the manufacturer wanted. You can read about it here:

    http://online.wsj.com/article/SB121901920116148325.html

    It seems like a real corporate protectionist ruling. I don’t see how the consumer benefits at all.

  6. 6 Iris // 2009.06.15 at 8:08 am

    I purchased Citizens of Humanity jeans in NYC for under the price they are being sold at Costco (~$97!) – I don’t see them suing these retailers! Also, these jeans are ridiculous (and the name ironic) – they are all sold with a 34″ inseam, so most average women have to pay a tailor to hem them!

  7. 7 Kimberly // 2009.06.11 at 11:05 am

    Jeff, you’re right in that this is a very similar suit to the Crocs case. I think you’re probably right about the weakening brand scenario too. I also noticed that Crocs are back to being sold in my local Costco. Maybe the Citizens of Humanity people should save the money that they’re paying a lawyer for this suit that is probably going nowhere useful for them.

    I couldn’t agree more with you, Rickie M!

  8. 8 Rickie M // 2009.06.11 at 12:06 am

    Considering those jeans were probably made in a sweatshop and cost about $1.50 to make, who is the real thief here?

    • 9 Cara // 2016.04.11 at 1:33 pm

      I just realized how old this was, but just wanted you to know – Citizens of Humanity jeans are made in the USA.

  9. 10 Jeff // 2009.06.10 at 5:43 pm

    I think I read it here a while back, but there was a stink when Costco was selling the Crocs shoes.

    It seems that no trendy clothing manufacturer would sell directly to a discount wholesale company since that would be an admission that they’re now a commodity. But when the popularity starts dropping, retailers or distributors would find themselves sitting on a pile of unsold goods and shuffle it behind the scenes to discount retailers.

    The original brand, Crocs or Citizens of Humanity, dislike this because it shows a weakening of the brand.

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

  Notify me when other users comment on this post.

 

Subscribe