At one point, LulaRoe was everywhere. Then, just a few years after their brightly colored leggings, dresses and other garments took to social media, the company found itself embroiled in a controversy: dozens of former consultants, employees and suppliers (including the all of Washington state) have filed a lawsuit against them. , citing quality control issues, unfair refund policies, deceptive practices, among other concerns.
LulaRoe’s downfall takes center stage in Amazon’s new docuseries, LulaRich. At the start of the four-part series, the founders of LulaRoe DeAnne and Mark Stidham paint a pretty picture of their business: DeAnne, a 14-year-old “struggling mother”, sewed a skirt for her daughter and came up with a plan to sell her designs on a larger scale. Over time, they recruited a team of retailers (also known as consultants or distributors) to help them sell their designs. Then, in four years, the company exceeded $ 1 billion in sales and employed more than 80,000 consultants.
As the episodes unfold, we get a whole different side of the story – the one told by former consultants and employees who exposed the pressures, demands, and harsh realities of working for LulaRoe. A former consultant has revealed that after receiving moldy and torn clothes, her once thriving business stalled, forcing her to file for bankruptcy, even selling her house and two cars, one of which had a license plate who said “LulaRoe3.” Former employee Derryl Trujillo admitted that when the company abruptly ended its refund policy, he came to the conclusion that his job was not serving customers; it only served the founders of the company.
Even when questioned, Mark and DeAnne continue to support their actions, denying that they ever created a pyramid scheme in the first place – intentionally or not. But throughout the docuseries, they also talk about the business in the present tense, leading many viewers to wonder if LulaRoe is still in business amid million dollar lawsuits and workplace scandals. The short answer: Yes, LulaRoe is still here in 2021.
If you take a quick glance at their social media accounts and website, it looks like everything is going smoothly. Their Instagram page is full of smiling retailers, fun models, and stories of their successes, like the 2020 LuLaRoe Cruise, aptly named the DREAM trip. Their website clearly explains their mission to anyone who visits: “To provide an opportunity for people to create freedom by selling comfortable, affordable and stylish clothes”.
Even after settling a major lawsuit with Washington state by agreeing to pay a $ 4.75 million fine, LulaRoe still has dozens of unresolved lawsuits against them. For this reason, it is not clear how well the company is doing really well at the moment. In a recent Instagram post, LulaRoe said he has 17,000 active retailers, a far cry from the 80,000 they had in 2017. Of those retailers, the tax return shows that about half made less than $ 5,000 in sales. product sales and bonuses (now called the “Executive Compensation Plan”).
The most notable difference between yesterday and today: in LulaRich, former retailers reveal that the cost of starting new retailers ranged from $ 5,000 to $ 10,000, prompting many women to take out loans (even sell their breast milk) to join. Today, it costs $ 499 to join – but just like joining any other tiered marketing company, it still comes with the same level of risk.
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