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Boohoo asks court to dismiss ‘fake’ discounts lawsuit

By Huw Hughes

29 Sep 2020

Boohoo has asked a Los Angeles court to dismiss a 100 million dollar (79 million pound) lawsuit over allegations the British fast-fashion retailer was offering “fake” discounts.

The retailer and as its subsidiaries PrettyLittleThing and Nasty Gal face civil claims that they are deceiving shoppers by running fake sales and promotions. It is accused of luring customers by offering heavy discounts on inflated prices rather than the original, regular price.

One of the three court claims was filed in April but was not disclosed to investors ahead of the company’s 197 million pound fundraising in May, The Daily Telegraph reports. The retailer asked the court this month to dismiss the class action.

In a court filing, Boohoo lawyers argued that the claimants had not claimed to be left “out of pocket”, despite alleging they were victims of deception. It also said customers outside California should be excluded from the case and that the individuals fronting the lawsuit had no standing to bring claims relating to items they never purchased.

This isn’t the only controversy Boohoo has been caught up in in recent months. An independent review of the retailer’s UK supply chain, concluded last week, found “many failings”.

The review found that from “(at the very latest) December 2019, senior Boohoo directors knew for a fact that there were very serious issues about the treatment of factory workers in Leicester” and “whilst it put in place a programme intended to remedy this, it did not move quickly enough.”

However, it concluded Boohoo “did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester”.

It came following an undercover investigation in July by The Sunday Times alleging some of the Leicester factories supplying clothes to Boohoo were paying workers just 3.50 pounds per hour and forcing some to work while sick. Boohoo denied claims of illegal wages.

Photo credit: Boohoo