Apparel chain Goody's Family Clothing Inc on Monday said it may appeal a court's ruling it must pay fashion giant Tommy Hilfiger Corp $11 million for selling counterfeit clothing and trademark infringement.

The Tennessee-based operator of 300 stores was on Friday ordered to pay Hilfiger $2.1m in damages from its sale of fake T-shirts and nearly $9m for trademark infringement related to the labelling of three lines of private label jeans formerly used by the retailer.

"While we are disappointed and surprised by the court's decision, based on a preliminary review of the decision, we believe we have strong grounds for appeal and are currently reviewing our options," said chairman and CEO, Robert Goodfriend.

"In the matter of the T-shirts, Goody's did not knowingly sell counterfeit merchandise, and we strongly disagree with the court's finding of willful blindness. We also vigorously dispute the court's finding that we intended to copy and derive benefit from the Tommy Hilfiger trademark.

"This finding is particularly surprising in view of the court's explicit acknowledgement that it is not unusual for companies to draw inspiration from other trademarks and a number of its other findings, including that there was no actual confusion between the Hilfiger brand and the Goody's private label jeans."

Goody's added it has insurance coverage in excess of the amount of the damage award, but the insurers have reserved their rights regarding their obligation to indemnify Goody's, and there can be no assurances that the insurance will be available.