The company, which owns stores throughout Edinburgh, pleaded guilty yesterday to criminal charge of "misleading" customers.
Trading Standards officers were tipped off that the firm was deliberately mislabelling cashmere garments, leaving customers to believe the goods were Scottish-made.
Officers carried out test buys of the products after first tracing the supplier of the imported clothes, who admitted they were shipped in from China.
The court heard that a member of staff at the shop admitted to investigators that he knew the product labelling was "inaccurate".
A lawyer for the company, run by brothers Malap, Surinder and Galab Singh, along with nephew Dildar, admitted the charge at Edinburgh Sheriff Court.
The charge stated that the Gold Brothers, trading as Abercrombie Cashmere, supplied and offered for sale cashmere garments which had "a misleading statement of geographical origin" between August 27 and September 15 last year.
The firm now faces a fine after sentencing was deferred.
Depute fiscal Robert Freeman said: "The UK supplier stated that the goods were sourced outside Scotland, specifically from China."
He added that a member of the Gold Brothers staff told officers that he was "fully aware" that the investigation had been launched, as its UK supplier had given a tip-off.
But Mr Freeman told the court "he failed to take action in relation to removing this particular labelling".
Deferring sentence, Sheriff Reith QC asked the procurator fiscal's office to come back with figures on how much the Gold Brothers paid the UK supplier for the goods, and how much was charged in the shop.
Kenneth McFarlane, representing the Gold Brothers, was asked to return to court next week with details of the sales of the mislabelled goods.