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Boohoo agrees preliminary terms to settle U.S. class action lawsuit

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Nov 4 (Reuters) - Boohoo said on Thursday it has agreed to terms of a preliminary settlement with parties that brought a U.S. class action claim alleging that the British online fashion retailer's promotions in California misled shoppers.

The company, which sells clothing, shoes, accessories and beauty products, said the preliminary settlement will be covered in full by its existing claims provisions, which stood at 19.1 million pounds ($26.1 million) at Aug. 31.

The Financial Times had reported in July that Boohoo could face total damages of more than $100 million if the claims brought in a court for the Central District of California succeed, citing lawyers for the claimants.

News of the potential settlement helped to send Boohoo shares 3% higher in early trade.

Boohoo said there was no guarantee that the preliminary settlement will result in a final resolution of the claim, but that the parties will now work together to incorporate the terms into a legally binding settlement agreement. ($1 = 0.7321 pounds) (Reporting by Yadarisa Shabong in Bengaluru; Editing by Keith Weir and Emelia Sithole-Matarise)