An appeals court has rejected May Department Stores Co's plea to quash a preliminary injunction banning it from selling a new women's apparel line described as "confusingly similar" to one owned by Bebe Stores Inc.

The St Louis-based company was in October given a deadline of December 31 to sell all the "Be" apparel range already made and shipped - a verdict it claims could cost it up to $2 million.

May's lawyers had told appeal judges that Bebe had not proven that its new brand was confusing shoppers looking for its "Bebe" brand and they had found up to 28 other brands that included the word.

It had hoped to overturn the decision on appeal but that request has been dismissed and California-based Bebe on Friday announced it planned to ask the courts for compensation for lost sales.

Bebe chairman and CEO Manny Mashouf said: "Once again, we have been vindicated by the courts."We have said all along that May Stores gained an unfair competitive advantage when it copied our name, clothing designs and store look and tried to sell to our customers. The courts have recognised this and put a stop to it."

He added his firm's sales have dropped since May Stores introduced its line this summer. "This clearly shows that any success May Stores had with this line is because our customers associated it with bebe. We are now asking the courts to compel May Stores to compensate us for the harm it has caused."