Boohoo has settled a $197m class action in the US which accused the fashion giant of faking discounts.
The claims, which related to the Manchester group's PrettyLittleThing, NastyGal and boohooMAN brands, alleged that prices had been artificially inflated. That would have meant that the brands had never sold the garments at the original price on its US website and that the markdowns would have been used to lead customers to believe they were receiving a discount.
It is understood that the settlement has been reached "without admission of liability". It is expected that around 9.4 million people in the US are eligible for pay-outs in the form of gift cards and free shipping.
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BusinessLive also understands that the settlement includes a requirement that the websites of PrettyLittleThing, NastyGal and boohooMAN post a disclaimer that the prices listed as reference prices are not based on former prices for the products. Instead they are based on the group's opinion on what the full retail value of an item should be.
According to Boohoo's half-year results to August 2022, the group has set aside a £17.1m legal provision and it is understood that the figure will be enough to cover the expected redemption rates on the vouchers. The case comes after Boohoo agreed a final settlement in a class about misleading customers on pricing in May 2022.
That settlement was also made "without admission of liability". Boohoo declined to comment when contacted by BusinessLive.
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