Redmond bargain store in legal fight over Costco salvage items
Published 4:00 am Wednesday, January 6, 2010
A legal battle of bargain stores pits Eagle Bargain Outlet of Portland against The Bargain Station of Redmond in a dispute over the sale of salvage items from Costco Wholesale Corp.
Eagle Bargain Outlet, which has four stores in the Portland metropolitan area, has filed a lawsuit against The Bargain Station, stating the latter broke an agreement to buy Costco salvage items from Eagle and negotiated its own deal with the Issaquah, Wash.-based retailer that provides members-only warehouse shopping.
Neither Troy Gambee, president of Eagle Bargain Outlet, nor his attorney could be reached for comment Tuesday, and Kelly Gobler, owner of The Bargain Station, at 2014 S. U.S. Highway 97, declined to comment.
However, a Costco official said the company does not do business with either and suggested the bargain stores most likely get any Costco merchandise from a third party.
Costco sells salvage items — merchandise returned by customers — to liquidators and forbids them from using the Costco name, said Hernan Rubio, assistant vice president of operations at Costco.
“We try and protect our name, and we’re not in the B market,” he said.
The Costco brand does not appear on a Web site for Eagle Bargain Outlet, which states that it offers the same products as big department stores.
However, it showed up in the results of a Google search for the store, describing it as “specializing in Costco overstock.”
A Web site featuring The Bargain Outlet also does not mention Costco, although it refers to “Kirkland products.”
Clothing, tea and batteries with the Kirkland Signature brand, which Costco calls its “premium private label,” could be found Tuesday on The Bargain Station’s shelves, but much of the merchandise — including clothing, shoes, big-screen televisions and blank CDs — carried only manufacturers’ labels.
In the lawsuit filed in Deschutes County Circuit Court, Eagle Bargain Outlet states it signed a contract with Nicholas Gobler, Kelly Gobler’s former husband, in 2007. The contract, a copy of which is attached to the complaint, states Nicholas Gobler agreed to purchase Costco salvage items exclusively from Gambee and Eagle Bargain Outlet and pay Gambee a 10 percent commission.
But when the Goblers divorced, according to the lawsuit, Kelly Gobler “negotiated directly with Costco.” She is not mentioned in the contract.
Eagle Bargain Outlet seeks $336,000 in damages, along with costs and a judgment ordering The Bargain Station to stop interfering in its business relationships.
A pretrial hearing has been scheduled for March, according to the Oregon Judicial Information Network.