Boohoo’s co-founder and executive chairman must appear in court—virtually—for a four-hour deposition, a U.S. district court judge decided Wednesday.
The order stems from a $100 million lawsuit alleging the fast-fashion e-tailer’s perennial markdowns amount to false advertising. The suit, initially filed in April of last year, has since been combined with similar cases brought against Boohoo’s brands PrettyLittleThing and Nasty Gal.
Lawyers for the three plaintiffs have argued Boohoo’s business model relies on “deceiving customers with fake sales.” The reference prices listed on its sites, the original suit claimed, are “almost always, if not always, a falsely inflated price because Boohoo rarely, if ever, sells its items at the reference price.”
A Boohoo spokesperson said the company “vehemently” denies any allegation of fraudulent behavior.
“At Boohoo, we pride ourselves on offering our customers exceptional products and value across all of our brands,” the spokesperson added. “The low advertised prices that our customers pay are clearly disclosed and highly competitive to the prices offered by our competitors for similar styles. Our customers appreciate the quality and value received, as reflected by their loyalty and the low return rate. Given the existence of ongoing proceedings in the U.S.—which Boohoo intends to vigorously defend—it would be inappropriate to comment further.”
The plaintiffs filed to depose Mahmud Kamani in mid-June. A few weeks later, Boohoo countered with a protective order to prohibit such a deposition, arguing the executive is not “customarily” involved in setting prices and that lower-level employees would possess the relevant firsthand knowledge.
The court rejected Boohoo’s motion, writing that the plaintiffs had “presented evidence that Mr. Kamani has unique personal non-repetitive knowledge of facts relevant to this suit.” The judge quoted emails cited by the plaintiffs, including one in which Kamani explicitly takes control of the marketing spend amid Nasty Gal’s Australia launch in May 2019.
“Don’t want any spend in marketing without my authorization,” Kamani wrote in one of the cited passages. “I want to see and approve every penny … I’ve done this with carol twice before .. also no you tube and no nonsense .. I’m now in charge of all marketing spend in australia from now … we’re doing this my way .… the way that works.”
In another instance, Kamani tells his colleagues what prices to set for certain items and the deals they should offer. “wally , Britt only take instruction from me on this I will liaise directly with carol and John ….. I’m now running this campaign,” he wrote.
These messages revealed Kamani was “very ‘hands on’ in regard to pricing and advertising, contrary to the statements in his declaration,” the judge said. The executive’s statements saying he had done this before, he added, suggests he could be applying the same policy in the U.S., as the plaintiffs had argued.
“No subordinate employee can speak to what Mr. Kamani meant by his statements,” the judge decided. “His knowledge is unique and nonrepetitive.”
Kamani’s deposition, to be conducted via videoconference due to Covid-19 concerns, must occur on or before Aug. 15.
“We presented hard evidence that Mr. Kamani is an architect and major driver of the fraudulent pricing schemes Boohoo Group is using to deceive its customers, and the Court found the evidence compelling over Mr. Kamani’s not-so-credible objection,” Yasin Almadani, a lawyer with the plaintiffs, said in a statement. “We intend to fully cross-examine Mr. Kamani and expose Boohoo’s widespread deception practices coming straight from the top.”