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Boohoo Closes in on Class-Action Settlement

Boohoo Group won’t have to put its executive chairman up for deposition after the British e-tailer hammered out preliminary terms settling a $100 million California class-action lawsuit.

Court documents filed Wednesday show that the fast-fashion giant reached a “settlement in principle,” subject to a judge’s sign-off, with plaintiffs who originally filed their pricing-practice suit in April last year. The 19.1 million pounds ($26.1 million) that Boohoo earmarked in August to cover all claims will apply to the preliminary settlement, it said Thursday. Both parties will use the settlement framework to forge a legally binding agreement, though Boohoo warned that there is “no guarantee” that continuing talks won’t fall apart. Both “parties agree to postpone all depositions and written discovery,” the document stated.

Last year’s original complaint in a Los Angeles district court accused Boohoo of using fake promotions to cajole consumers into spending. The purveyor of cheap, trendy fashion “rarely, if ever” sells products at sticker prices, according to the legal filing’s dispute over deceptive discounts.

The court denied Boohoo’s request to dismiss the claims a year ago.

The plaintiffs sought to depose co-founder Mahmud Kamani over the pricing policies. Boohoo, which owns Karen Millen, Coast, Dorothy Perkins, Nasty Gal and PrettyLittleThing, Oasis and Warehouse plus its namesake brand, filed for a protective order prohibiting the deposition.

Boohoo is no stranger to controversy after an alleged “sweatshop scandal” erupted last year. A third-party investigation concluded that reports of low wages and unsafe conditions were “substantially true,” prompting the company to support a new garment-worker trust.

And earlier this year, Boohoo was on the receiving end of consumer claims of mislabeling accusing the company of selling the same products at drastically different prices. The BBC reported that Dorothy Perkins and Coast sold the same quilted puffer jacket through each of their separate channels, but that the Coast version was offered for sale at 34 pounds ($47) more. The Dorothy Perkins version sold for 20 pounds ($27). In another product labeling gaffe, a consumer told the publication that she paid 42 pounds ($58) for a skirt from upscale women’s wear brand Karen Millen, which she later discovered was from the mid-range label Oasis.

At the time Boohoo said it was conducting an investigation and that it would re-price all the crossover stock. The labels reportedly share the same suppliers.