Farouk Systems, the maker of the Chi filed a lawsuit this week against Costco alleging that it improperly sells the hairstyling tools, including counterfeit ones. Farouk claims that they only sell to authorized distributors, which in turn sell the tools and Farouk’s BioSilk-brand hair-care products to salons. It prohibits its distributors from selling to large retailers or wholesale clubs to avoid “tarnishing its reputation,” according to the lawsuit. According to them, Costco is selling the flat irons for as little as $59.99, whereas they cost at least $100 in salons. When I look online at Costco, all of the models or products are at least $69.99.
I think it’s so funny when these people say that selling something at Costco will tarnish their image or reputation. Some very big and prestigious names sell items at Costco, so, I don’t see how these people can lose reputation points for selling their straightening iron there. If it’s good enough for Cartier and Baccarat, it’s most likely good enough for Farouk Systems and their Chi.
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 manufacturers 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 manufacturers have brought against Costco, including the Citizens of Humanity jeans thing.
For more information on the lawsuit: