Boohoo close to settling US class action

Fast fashion retailer Boohoo said on Thursday that it is close to settling a California court case over fake promotions.

"Boohoo is pleased to report that the parties have notified the District Court that they have agreed to the terms of a preliminary settlement relating to the claim," it said. The preliminary settlement is covered in full by the existing provisions in the latest group accounts, it added.

"Whilst there is no guarantee that the preliminary settlement will result in a final settlement of the claim, the parties will now work together to incorporate the terms of the preliminary settlement into a legally binding settlement agreement."

Broker Peel Hunt, which rates the shares at ‘buy’, said: "The claims provision is currently shown as £19m, although this includes a number of other issues as well.

"Next steps will be to draft a long form agreement which will need to be ratified by the courts, suggesting this is unlikely to bed finalised until the New Year.

"Either way, the update should give investors confidence that this issue is close to being fully resolved."

At 1000 GMT, the shares were up 4.2% at 192.94p.