Kolos is the Arms Merchant/Blacksmith in the Town of Torchlight. According to his dialogue he wears a kilt (" It's not a skirt!") but at close inspection he's wearing pants and an apron, he is also possibly Scottish (accent).
His inventory consists of Armor and Weapons. His inventory randomized each time you return from a dungeon. (Like evey other shop in torchight)
Kolos' inventory scales around the player's level. e.g. Player Lv1 :Kolos' Inventory Lv1-6) He stocks Generic-Unique armor and weapons with the latter being rarer.