LuLaRoe cost some women their homes, their cars, their savings, their marriage
In 2015, Roberta Blevins was a busy hairdresser, traveling between San Diego and Los Angeles for work – and struggling to balance her career with co-parenting a four- and nine-year-old.
Then she heard about LuLaRoe from a group of moms on Facebook. The California-based clothing company – known for its vividly patterned leggings and dresses – offered business advisers a way to “earn full-time income for part-time work” from the comfort of their own homes.
To Blevins, it looked like a dream come true.
“I could sell leggings,” recalls Blevins, now 40. “It’s so easy. Everyone wears them.
“What I know now is that it was a scam,” she told The Post.
From 2014 to 2019, LuLaRoe leggings were ubiquitous on social media – slavishly peddled by women looking for the holy grail: setting their own schedules and working from home, with the promise of making big bucks. It was a classic multi-level marketing setup – or, as the Washington State Attorney General’s office claimed in a 2019 lawsuit against the company, a “pyramid scheme.”
This is now the subject of “LuLaRich», A docuseries in four parts broadcast on Amazon prime which offers insight into the explosive growth of the brand and how it led to fraud charges, lawsuits and ultimately consultants losing money, cars, homes and even their marriages .
Directors Jenner Furst and Julia Willoughby Nason also made “Fyre Fraud,” a Hulu documentary on the famous music festival 2017, and say the topics have a lot in common.
Both stories are filled with “delusions of grandeur – and that kind of relentless entrepreneurship that’s promoted from influencers to [strangers] on Facebook, ”Nason told the Post.
In September 2017, a little over a year after his signing, Blevins – who hosts the podcast “Life after MLM”(As in multi-level marketing programs) – had emerged. LuLaRoe was a pyramid scheme selling empty boss dreams. She resigned.
“There were red flags from the start,” Blevins said.
LuLaRoe was born from humble beginnings. Around 2012, DeAnn Stidham – who previously hosted dress nights for retailers – started selling homemade maxi skirts in the trunk of her car.
In five months, the Californian perennial had moved 20,000 pieces, she says in the docuseries. In 2013, DeAnn met a woman in Utah who said she could offload a bunch of skirts to her friends.
DeAnn called her husband, Mark. “[I] said, “What can I do to make it valuable to her?” “,” She says in the documentary series. Her advice: “You sell them to her … and she earns double [selling them to her friends].
“It was instant money and an instant opportunity,” she added.
This woman became LuLaRoe’s first business advisor, named after the Stidhams’ granddaughters, Lucy, Lola and Monroe.
While old-school multi-level marketing brands like Tupperware or Amway were all about women – often stay-at-home moms – throwing parties to promote the product and recruiting other women as salespersons, recent counterparts such as The Rodan + Les champs skincare line relies on social media. Even actress Ione Skye took to multi-level marketing a few years ago, selling Doterra essential oils with her singer husband Ben Lee and promote them on Instagram and YouTube.
The consultants took to Facebook to advertise LuLaRoe leggings nights and flaunt the financial freedom, big houses and luxury cars provided by their new gig.
The message spread like wildfire. In 2016, LulaRoe had made more than $ 70 million.
It worked like this: once a woman’s application – or, sometimes, a husband and wife team – was accepted, they paid the start-up costs (up to $ 15,000) and got started shoving clothes. Typically, they would mark leggings up to $ 25, having bought pairs at $ 10.50 each wholesale.
When Blevins joined in February 2016, buying for an initial $ 9,000, there was a shortage of leggings – so she had to shell out more money to buy them from other consultants.
Back then, budding consultants waited 90-100 days for approval because the company didn’t have enough manpower to meet demand.
LaShae Kimbrough, 43, was part of the integration team. She collected money from new consultants – which desperate women got by any means necessary, including taking out loans, opening zero-interest credit cards, and even selling their breast milk.
Kimbrough, 43, told the Post his team was making at least $ 1 million a day.
The consultants were paid for recruiting new salespeople into their teams. They received a reduction in the integration fees paid by their proteges who then brought in people under them.
In the docuseries, married couple Tiffany and Paul Ivanovsky said that at one point they had 1,100 people on their team and made between $ 22,000 and $ 42,000 a month in bonuses over the course of a year.
As the LuLaRoe gospel spread from coast to coast, society as a whole flew by the seat of its pants. The Stidhams, who have 14 children between them, have installed their inexperienced offspring in executive roles.
“Did any of them know how to run a business of this size? No, ”ex-employee Derryl Trujillo says in the film.
Blevins became skeptical when she began receiving shipments with damaged leggings – including wet pairs that she described as smelling “of chlorine and death.” On Facebook, more and more customers were posting comments about how their LuLaRoe clothes tore on first use.
Sources in “LuLaRich” say this was emblematic of bigger issues – like inexperienced leadership and growing too much too quickly, which led to shoddy production.
“It was like flying the plane while you were still building the plane. And you don’t even know how all the parts on the plane work. And you don’t even know how to fly the plane. You are not a pilot, ”said Sam Schultz, nephew and former employee of DeAnn. He was hired to produce corporate cruises and retreats where artists like Katy Perry and Kelly Clarkson performed.
On a cruise for the best sellers, Blevins praised a fellow consultant for her beauty in a swimsuit. “She said she had ‘weight loss surgery’ in Tijuana,” Blevins recalls. “She called a mentor leader who told me all about it.”
According to former consultant Courtney Harwood who appears in “LulaRich,” DeAnn pressured top performers to come to Tijuana and have gastric bypass surgery performed by her own doctor.
For Blevins, who was increasingly suspicious of a culture close to religious fanaticism, this was another reason to defect. “I was like, ‘How can I get away from this conversation? Do you really think i need [the surgery]? ‘. This whole trip was very cult.
Kimbrough believes DeAnn thrived on the money, the hard work of other women, and their adulation. “[DeAnn] managed to come up with a recipe for people to crawl at his feet. I give them credit for it because it happened for a long time and they made a lot of money. “
Finally, there were more consultants than interested buyers. The market was too flooded to make a profit.
And lawsuits had started to mount – many for copyright infringement, claiming LuLaRoe had stolen artwork to be printed on leggings. A 2017 class action lawsuit challenged the company’s return policy, with customers claiming the leggings were of poor quality. The brand was also sued by a former supplier for unpaid invoices
As morale began to wane, the brand implemented a policy whereby consultants could return inventory for reimbursement of their wholesale fees. The change led to an exodus. “I believe LulaRoe paid over a hundred million refunds during that time,” Blevins said.
She added that the cancellation of this policy at the end of 2017 led to her breaking point as she couldn’t handle her team members saying they were going to lose their home if they couldn’t get a refund. .
In 2019, the Washington State Attorney General filed a lawsuit against LuLaRoe, claiming it was a pyramid scheme that defrauded thousands of people out of millions of dollars. The case was settled in 2021, with the brand paying $ 4.75 million.
In the end, Blevins shelled out over $ 78,000 for inventory and sold around $ 83,000 – gross profit of $ 5,000. She earned around $ 65,000 in bonuses for signing up other women, which she now regrets. But she also took out a loan to buy the clothes and still has credit card debt.
Harwood, who was one of the top consultants, had bought a new home and matching Chevy Tahoes for her and her husband – all to keep up appearances and appear to be successful in the LuLaRoe food chain, and because she believed that the money would continue to flow. When she left in 2018, she had to file for bankruptcy, losing her home, vehicles and even her marriage.
“I thought I was better than everyone else,” she says tearfully on the show.
Consultant Ashleigh Lautaha, who left the company, says in the document that she has immersed herself so much in LuLaRoe culture that she has only had time for family or work. Her marriage broke up.
“The company has grown bigger than [the Stidhams], and what they could follow, ”co-director Willoughby Nason said of the couple. “They put out fires left and right. “
But she also sees how desperate women have been caught up in the race for success.
“There was a corrosive element of greed going over them.”