Oakley Sues Distributor

Oakley Inc. filed suit Wednesday charging its Singapore distributor, KMR Concepts PTE Ltd., with breach of contract for allegedly selling Oakley sunglasses to someone other than approved retailers.

The suit, filed in Orange County Superior Court, said KMR sold Oakley glasses to an undisclosed third party, a practice known as “diverting,” in violation of its distribution agreement. The glasses’ ultimate destination, Oakley contends, was the Costco discount warehouse chain.

If Costco were to sell Oakley’s high-priced products, it would harm the manufacturers’ image and reputation with both consumers and other retail customers, according to the suit.

Oakley is seeking an order requiring KMR to sell the glasses back to Oakley, as well as unspecified damages, including the cost of buying back the glasses. Officials at KMR couldn’t be reached for comment. A Costco attorney didn’t return phone calls. The company was not named as a defendant.