Top executives at Boohoo are set to be quizzed by lawyers after judges rejected the retailer’s attempt to dismiss a $100m (£75m) legal action over “fake” discounts.
The fast fashion retailer is accused of offering big discounts to customers based on inflated original prices which were almost never the prices it had previously asked customers to pay.
Manchester-based Boohoo and its subsidiaries PrettyLittleThing and Nasty Gal failed this month to persuade judges to throw out the class action lawsuit.
The court sided with the lawyers bringing the legal claim but reserved judgment on one technical legal argument about whether it has jurisdiction over the parent company in the Boohoo group.
The US lawyers behind the claim said they now expect to take testimony from Boohoo’s executives and high-ranking managers.
Neil Catto, Boohoo’s chief financial officer, is among those expected to face questioning as he provided evidence to support the company’s bid to have the case dismissed.
Ahmed Ibrahim of AI Law, one of the lawyers leading the claim, said: “Boohoo, PrettyLittleThing and Nasty Gal need to find a new business model where they shoot straight with their customers.
“They should admit what they’ve been doing is wrong, issue refunds to the customers they have misled, and put a stop to the fake sales and false advertising.”
The case is the latest reputational risk for Aim-listed Boohoo after scrutiny of the treatment of workers in its supply chain.
Auditors from PwC are preparing to stand down after the furore but Boohoo has so far failed to announce a replacement with most of the UK’s large audit firms ruling themselves out of the running for the vacancy because of conflicts of interest or reputational concerns.
A Boohoo spokesman said it intends to rigorously defend the legal claims but would not comment further on the case.
The firm did not disclose the lawsuit in its interim results.