Boohoo has reached a final settlement over a US 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 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 percent at 07:43 GMT, extending 2022 losses to 36 percent.
The sector was weak with Asos down 2.4 percent and Next down 1.7 percent.
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.
By James Davey, Editors: Elizabeth Piper and Jason Neely
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Boohoo Sees Tough Year Ahead as Profit Falls 28%
The group said it made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £125 million ($156 million) in the year to Feb. 28 — in line with guidance and down from £173.6 million in 2020-21.
