How Costco Built a $10 Billion Fashion Empire — The Secret Behind Its Apparel Boom
Discover how Costco quietly built a $10 billion apparel empire—outpacing Gap, Tommy Hilfiger, and Old Navy. Learn how its Kirkland brand, viral trends, and low prices reshaped global fashion retail.
From Rotisserie Chickens to Runway Vibes
Costco—famous for bulk groceries and $5 rotisserie chickens—has transformed into one of the biggest clothing retailers in the world, with an apparel business worth nearly $10 billion.
What started as a warehouse for essentials is now a destination for fashion hunters, where shoppers rush to grab trending Columbia fleeces, Levi’s jeans, and even Kirkland Signature sweatshirts that have gone viral online.
Over the last five years, Costco’s apparel sales jumped 40%, leaving competitors like BJ’s (28%) and Sam’s Club (21%) far behind. Its clothing segment is now bigger than Gap, Tommy Hilfiger, Abercrombie & Fitch, and Old Navy combined.
The Secret Behind Costco’s Fashion Success
Costco’s winning formula? Limited items, bought in bulk, sold at unbeatable prices.
Its blend of top brands and Kirkland Signature, the store’s beloved private label, gives members premium value without the premium price.
Kirkland Signature, born in 1995, has achieved cult status. Once dismissed as “dad fashion,” it’s now “value chic.” Social media helped transform it into a symbol of smart spending and cool simplicity—where even sweatpants can make a statement.
Exclusive Partnerships and Surprise Drops
Most Costco apparel is created through special brand collaborations or licensed collections. Some products are simplified “diffusion lines” of popular brands, made just for Costco members.
Every now and then, shoppers are surprised to find Birkenstocks or Saks Fifth Avenue apparel in-store—usually from limited surplus deals or overruns. That “treasure hunt” experience keeps people coming back, never knowing what gem they’ll find next.
The Lululemon Lawsuit: Free Advertising?
In 2025, Lululemon sued Costco, claiming it sold lookalike yoga wear at lower prices. Ironically, the lawsuit gave Costco massive attention—cementing its place as a serious player in fashion retail.
Experts say the move backfired on Lululemon. It made Costco look like the people’s favorite—delivering quality and affordability, while Lululemon appeared out of touch. After all, shoppers love dupes—and Costco delivers them legally and effectively.
Small Margins. Massive Volume. Loyal Customers.
Costco’s business model runs on membership fees, allowing razor-thin profit margins.
While Walmart and Target operate with 20–30% gross margins, Costco stays around 10%, keeping its markups at just 14%—a strategy that wins customer loyalty for life.
Even for high-end items—like $10,000 diamond rings or vintage wines—Costco sticks to its promise: “You’ll still pay less than anywhere else.”
The Stock Story
Despite some short-term volatility, Costco remains a long-term winner.
Its stock has risen 150% over the past five years, backed by consistent expansion across the globe. Analysts call it one of the most trusted and resilient brands in retail, thanks to its focus on essentials, smart pricing, and expanding fashion appeal.
The Costco Way
Costco doesn’t chase luxury. It creates its own version of it—value-driven, authentic, and smart.
In an age where consumers seek both quality and affordability, Costco has proven that style doesn’t have to come with a luxury tag. From groceries to garments, it’s not just selling products—it’s selling a lifestyle built on trust and value.
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