Boohoo sued for fake discounts! Pay $100 million in damages

Fast fashion retailer Boohoo said it could be forced to pay more than $100 million in damages as it battles a lawsuit alleging its brands made false sales to mislead shoppers.

According to a lawsuit filed in California last year, some Boohoo brands including PrettyLittleThing and NastyGal were accused of offering discounts based on completely "fake" original prices to lure US customers for up to five years.

Its co-founder and executive chairman, Mahmud Kamani, has been asked to testify under oath about the company's inner workings. Now there is a dispute over whether he must testify under oath after emails between Kamani and executives were used as evidence in a Los Angeles court last week.

In a 2019 email, Kamani, who had just been personally involved in the marketing campaign to launch the brand in Australia, told employees to "show lots of offers on the screen," adding that he wanted to "see and approve every penny," according to foreign media reports.

The attorneys argued that Kamani’s emails were evidence of the “same false pricing strategy” cited in the lawsuit and that he must testify because he had firsthand knowledge of facts relevant to their claims.

Boohoo unsuccessfully tried to have the case thrown out of court in November, arguing that more junior staff with first-hand knowledge of pricing should be called to give evidence because Kamani was "not usually involved in setting prices for individual items".

The controversial cases come at a difficult time for Boohoo, which has only just begun to regain the trust of investors and the public following similar court cases in the UK.

Last year, Boohoo was accused of engaging in modern slavery, largely due to revelations that working conditions were poor and that many of its suppliers paid workers below the minimum wage. But similarly strongly worded emails from Cumani were used as evidence in the investigation into the allegations conducted by Alison Levitt QC.

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Fake discounts

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