Boohoo could be forced to pay damages of over $100 million as it becomes embroiled in another damning lawsuit claiming its brands run sham sales to mislead shoppers.
The fast fashion retailer’s reputation is once again under threat as its co-founder and executive chair Mahmud Kamani has been called on to testify under oath about the company’s inner workings.
According to the lawsuit, filed in California last year, a number of Boohoo’s brands including its PrettyLittleThing and NastyGal stand accused of offering discounts based on entirely “fake” original prices to attract customers in the US for up to five years.
Kamani is now engaged in a dispute over whether he must testify under oath, after emails between him and executives were used as evidence in a Los Angeles court last week.
In the 2019 emails Kamani, who had just taken personal control of a marketing campaign to launch the brand in Australia, reportedly told staff to “put massive offers on screen”, adding that he wanted to “see and approve every penny cent”.
Lawyers have argued that Kamani’s emails are evidence of “the same false pricing tactics” mentioned in the lawsuit, and that he must testify because he has unique, first-hand knowledge of facts relevant to their claim.
Boohoo, which failed to get the case thrown out of court in November last year, argued that more junior staff with first-hand knowledge of pricing should testify instead, as Kamani “is not customarily involved in setting prices for individual items”.
The controversial case comes at a difficult time for Boohoo, which has just started to regain the trust of investors and the public after a similar court case in the UK.
Last year Boohoo was accused of engaging in modern slavery after a damning expose revealed poor working conditions and numerous examples of paying workers less than minimum wage at many of its suppliers.
In an investigation into the allegations carried out by Alison Levitt QC, similar strongly worded emails from Kumani were used as evidence.