Boohoo agrees to final settlement of US class-action lawsuit
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(Reuters) – Boohoo has reached a final settlement over a U.S. class-action claim alleging the British online fashion retailer's promotions in California misled shoppers, it said on Tuesday.
The group, which sells clothing, shoes, accessories and beauty products aimed at 16- to 40-year-olds, had agreed to terms for a preliminary settlement of the action in November.
Boohoo said the settlement is without admission of liability and within its existing legal provisions, which stood at 17.8 million pounds ($22.4 million) as of Feb. 28.
The settlement remains subject to review and approval by the United States District Court for the Central District of California.
"It must be a marginal positive to have the issue resolved and covered by existing provisions," said analysts at Jefferies.
However, shares in Boohoo were down 4.5%, extending 2022 losses to 36%.
The sector was weak with ASOS down 2.4% and Next down 1.7%.
Earlier this month, Boohoo warned sales growth would slow this year, hit by a squeeze on consumer spending, higher product return rates and continuing supply chain and delivery problems.
