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Boohoo agrees to preliminary terms in U.S. class action lawsuit

By Kristopher Fraser

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Business of Fashion has reported that Boohoo has agreed to terms of a preliminary settlement with parties that brought a U.S. class action lawsuit against the British retailer claiming what was essentially false advertising in California. According to the lawsuit, the company had certain promotions that misled shoppers.

The retailer said that settlement will be covered in full by its existing claims provisions which were 26.1 million dollars as of August 31. According to a July story by the Financial Times, Boohoo could still face damages of up to 100 million dollars if the claims succeed.

The preliminary settlement doesn’t guarantee a final resolution of the claim, but now both parties can work on a settlement agreement. The lawsuits were a trio where Boohoo was alleged to have inflated original prices of its products in order to “deceive customers into a false belief that the sale prices [that they advertise on their e-commerce sites] are deeply discounted bargain prices.” The lawsuit dates back to July 2020.

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