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The "Trail of Tiers" dress has been called out on Twitter for its similarity to the phrase "Trail of Tears".
During the 1830s thousands of Native Americans were forced to relocate from ancestral land, it is now referred to as the "Trail of Tears".
Cooper has now apologised for the "embarrassing mistake in using a term whose meaning we were completely unaware of".
The $299 dress has now been removed from Cooper's website and recalled from stores to be renamed.
Professor of Māori Education at Victoria University of Wellington Joanna Kidman described the event as a "genocide" as the Indian removal act of 1830 allowed white settlers to remove Native Americans in large numbers from their ancestral homeland.
It is estimated 46,000 Native Americans between 1830 and 1850 were forcibly removed by the US Government.
The trail is more than 8000km long, with thousands dying on the journey.
Last night while scrolling through the internet, Kidman came across an ad for Trelise Cooper, looking through the fashion labels website she came across the "Trail of Tiers" dress.
"The dress came up and I couldn't quite believe it, I took a double take, I couldn't believe what I was seeing and then I realised what I was seeing," a shocked Kidman told The New Zealand Herald.
"The trail of tears is one of the most shameful episodes in American colonial history, it's not the sort of thing one would generally use as a selling point for a frock, a polyester frock.
"I'm not sure there would be many women who would want to wear a dress that summoned images of genocide, starvation and rape."
Although the spelling of the dress name is different, Kidman says her mind immediately went straight to the "Trail of Tears".
She said the fashion industry needed to "engage more readily with indigenous populations and groups" so incidents like these do not continue.
"If there were people around her or who know about the name she claims this wouldn't have happened."
Kidman took to Twitter to share the conversation with other indigenous people nationally and internationally saying "we have this conversation all the time on and off Twitter".
Her tweet has received a lot of reaction, with many Twitter users shocked to learn about the dress name.
Kidman has called on Cooper to donate all proceeds from the sale of her "Trail of Tiers" Dress to Navajo Nation and Hopi Nation reservations in the US.
In a statement to the Herald, the Trelise Cooper Group has apologised.
"We sincerely apologise for our embarrassing mistake in using a term whose meaning
we were completely unaware of.
"We called a dress Trail of Tiers because it is a long tiered dress with a trailing back hem,
unaware of the meaning of the term Trail of Tears."
The group acknowledge the mistake was made out of "ignorance".
"But given how much pain ignorance of past injustice has caused, we are distressed that
we have added to this harm.
"We apologise for any hurt and harm that this mistake has caused."
It is not the first time Cooper has received allegations of racism in her clothing line.
In 2014, she apologised on social media after models on a runway wore a Native American headdress.
In 2011, a number of Cooper's models had the skin around their eyes stretched back with tape to create an "Asian" look.
Kidman said she wondered whether Cooper had not learnt from the past mistakes.
"This is not the first time this has happened and I wonder is she genuinely not learning from her experiences or is there kind of a wilful ignorance or is she wanting to use controversy to sell dresses."