LONDON -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 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% at 0743 GMT, extending 2022 losses to 36%.
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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.
($1 = 0.7943 pounds)
(Reporting by James Davey, editing by Elizabeth Piper and Jason Neely)