A $100 million lawsuit alleging Boohoo’s perennial markdowns amount to false advertising could result in the deposition of the fast-fashion e-tailer’s co-founder and executive chairman.
Lawyers representing Farid Khan, Haya Hilton and Olivia Lee—the three plaintiffs suing Boohoo and its brands PrettyLittleThing and Nasty Gal for their pricing practices—filed to depose Mahmud Kamani June 18. Since then, Boohoo has filed for a protective order prohibiting such a deposition, arguing Kamani is not “customarily” involved in setting prices and that lower-level employees would possess the relevant firsthand knowledge.
Defending their deposition, the plaintiffs’ lawyers pointed to emails produced by the defense during discovery. In one of these exchanges, sent amid Nasty Gal’s Australia launch in May 2019, Kamani can be seen explicitly taking control of the discounting regime.
“Wtf why are we putting baranding [sic] ads out without a massive offer,” Kamani wrote in one of the emails. “What chance tmdo [sic] we stand !!!!. WE WANT SALES SALES SALES …. not interested in any other bollocks … reduce the cost to $80 and jacket to $40 then 50 off and free over 50 we need sales .. wally , Britt only take instruction from me on this I will liaise directly with carol and John ….. I’m now running this campaign…”
Boohoo, meanwhile, asserts the knowledge the plaintiffs would gain from Kamani could be obtained from other sources who have yet to be deposed. Furthermore, the company’s lawyers argued that the deposition would be inappropriate during the class discovery phase, which is scheduled to last until Aug. 31.
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The motion for the protective order is set for a hearing on Aug. 3.
Khan, a Los Angeles resident, first sued Boohoo April last year in the U.S. District Court for the Central District of California. In the suit, Khan’s lawyers argued Boohoo’s business model relies on “deceiving customers with fake sales.” The reference prices listed on its sites, the suit claimed, are “almost always, if not always, a falsely inflated price because Boohoo rarely, if ever, sells its items at the reference price.”
Khan’s suit asserts Boohoo’s actions amount to a violation of the California Unfair Competition Law, California False Advertising Law and California Consumer Legal Remedies Act, as well as fraud.
Despite last year’s alleged “sweatshop scandal”—and the third-party investigation that concluded reports of low wages and unsafe conditions were “substantially true”—Boohoo has seen sales soar during the pandemic. According to the company’s most recent earnings report, its sales have ballooned by 91 percent over the past two years. Its guidance for the year ending Feb. 28, 2022, expects the company will see revenue grow 25 percent.