Boohoo execs could be questioned in US 'fake discount' case - report

By

Sandra Halliday

Published
Nov 23, 2020

A US lawsuit could see senior executives at fast fashion e-tailer Boohoo being quizzed by lawyers following the rejection by a judge of its attempt to dismiss a $100 million (£75m) action over allegedly fake discounts, a report said on Monday.

The Telegraph reported the development in the class action lawsuit that alleges the retailer inflated original prices, even though its goods were never actually available at those prices. The discounts it then offered therefore looked much larger than they actually were.

The company and its PrettyLittleThing and Nasty Gal subsidiaries failed this month to get the class action lawsuit thrown out, the newspaper said.

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But the American court also reserved judgement on a technical legal argument about whether it had jurisdiction over the brands’ parent company, UK-listed Boohoo Group.

The American lawyers representing the claimants said they expect Boohoo executives, including CFO Neil Catto, and senior management to give testimony in the case.

But a Boohoo spokesman told the newspaper that the company intends to rigorously defend the legal claims, although it would not comment further on the case.

The case comes after the company has faced a number of damaging news stories this year. These included the recent scandal about manufacturing in Leicester with workers being paid less than the minimum wage at unauthorised sub-contractor factories. Additionally, the resignation of its auditor was interpreted negatively.