NEW YORK (CNN) - Italian fashion designer Fendi is claiming in a lawsuit that Wal-Mart is selling knock-off handbags at its Sam's Club warehouse stores.

Wal-Mart has denied the allegation and said the items are authentic.

The fashion group filed its lawsuit against Wal-Mart in U.S. District Court in New York on Friday, alleging that the retailer is selling handbags, wallets and key chains that are counterfeit.

Fendi asked that Wal-Mart stop the sale of the items as well as pay damages and legal fees.

The suit claims Wal-Mart does not have a purchasing agreement with Fendi or anyone affiliated with the company. Fendi also claims that Wal-Mart never sought trademark identification.

The lawsuit cites several alleged examples knock-offs being sold at Sam's Club at discounted prices. In one example, a handbag with the Fendi logo allegedly was being sold at a Las Vegas store for $295. Fendi claims the original version of the handbag would retail for $925.

Fendi also notes that its products are sold at exclusive boutiques and department stores such as Neiman Marcus, Saks Fifth Avenue, and Bloomingdales.

A spokesman for Wal-Mart said that company policy prohibits the retailer from selling knock-offs. He added the company does not believe that the complaint has merit and Wal-Mart can demonstrate that the products sold in their stores are authentic.

The spokesman said that the company can also demonstrate that it properly obtained the Fendi products.

There are 566 Sam's Club stores in the United States.

Shares of Wal-Mart (Research) edged lower in late trade Monday on the New York Stock Exchange.

--from CNN's Maria Gavrilovic

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