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How LuLaRoe cost some women their homes, cars, savings, and marriages – New York Post


In 2015, Roberta Blevins was a busy hairstylist, traveling between San Diego and Los Angeles for work — and struggling to find balance between her career and co-parenting a four-year-old and nine-year-old.

Then she heard about LuLaRoe from a Facebook mom’s group. The California clothing company — known for its brightly patterned leggings and dresses — offered sales consultants a way to “earn full-time income for part-time work” from the comfort of their own homes.

For Blevins, it sounded like a dream come true.
 “I could sell leggings,” Blevins, now 40, remembers thinking. “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 pervasive on social media — slavishly peddled by women seeking the holy grail: setting their own hours and working from home, with the promise of big money. It was a classic multi-level marketing set-up — or, as the Washington State Attorney General’s Office claimed in a 2019 suit against the company, a “pyramid scheme.”

The company's founders DeAnne and Mark Stidham.
LulaRoe founders DeAnne and Mark Stidham.
Amazon

It’s now the subject of “LuLaRich,” a four-part docuseries streaming on Amazon Prime that offers a look inside the brand’s explosive growth and how it led to fraud accusations, 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 about the notorious 2017 musical festival, and say the subjects have a lot in common.

Both stories are filled with “delusions of grandeur — and this type of incessant entrepreneurship that is promoted from influencers to [strangers] on Facebook,” Nason told The Post.

By September  2017, just a little over a year after she signed on, Blevins — who hosts the podcast “Life After MLM” (as in multi-level marketing schemes) — had seen the light. LuLaRoe was a pyramid scheme selling empty girl-boss dreams. She quit.

“There were red flags from the beginning,” Blevins said.

LuLaRoe sprang from humble beginnings. Around 2012, DeAnn Stidham — who previously organized clothing parties for retailers — started selling homemade maxi-skirts from the trunk of her car.

Within five months, the vivacious Californian had moved 20,000 pieces, she says in the docuseries. In 2013, DeAnn met a woman in Utah who said she could unload a bunch of the 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 docu-series. His advice: “You sell them to her … and she gets to make double the money [selling them to her friends].

“It was instant cash and instant opportunity,” she added.

That woman became the first sales consultant for LuLaRoe, which is named for  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 — hosting parties to push product and recruit other women as sales people under them, recent counterparts such as the skincare line Rodan + Fields  rely on social media. Even the actress Ione Skye got into multi-level marketing a few years ago, selling Doterra essential oils with her singer husband Ben Lee and promoting them on Instagram and YouTube.

Ashleigh Lautaha (here with LuLaRoe clothing she sold) says in the documentary “LuLaRich” — about the crash and burn of the company — that she got so wrapped up in the brand’s culture that it led to the collapse of her marriage.
Ashleigh Lautaha (here with LuLaRoe clothing she sold) says in the documentary “LuLaRich” — about the crash and burn of the company — that she got so wrapped up in the brand’s culture that it led to the collapse of her marriage.
Amazon
Seller LaShae Kimbroughgrew disenchanted with LuLaRoe.
Seller LaShae Kimbroughgrew disenchanted with LuLaRoe.
Amazon
Former seller Roberta Blevins.
Former seller Roberta Blevins.
Roberta Blevins

Consultants took to Facebook to advertise LuLaRoe leggings parties and flaunt the financial freedom, big homes and fancy cars their new gig provided.

The message spread like a wildfire. By 2016, LulaRoe had raked in more than $70 million.

It worked like this: Once a woman’s — or, sometimes, a husband-and-wife team’s — application was accepted, they paid the start-up costs (as much as $15,000) and started hustling the clothes. Typically, they marked the leggings up to $25, after having bought pairs for $10.50 each wholesale.

When Blevins joined in February 2016, buying in for an initial fee of $9,000, there was a leggings shortage — so she had to shell out more money to buy them off other consultants.

At the time, eager wannabe consultants were waiting anywhere from 90 to 100 days for approval because the company didn’t have enough manpower to keep up with demand.
LaShae Kimbrough, 43, was part of the onboarding team. She’d collect new consultants’ money — which desperate women raised by any means necessary, including taking out loans, opening zero-interest credit cards and even selling their breast milk.

Kimbrough 43, told The Post that her team was bringing in at least a $1 million dollars a day.

Consultants were compensated for recruiting new sales people to their teams. They received a cut of onboarding costs paid by their protégés 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 raked in anywhere from $22,000 to $42,000 a month in bonuses over the course of a year.

While the gospel of LuLaRoe spread coast to coast, the company at large was flying by the seat of its pants. The Stidhams, who have 14 children between them, installed their inexperienced offspring in executive roles.

“Did any of them have a clue how to run a company of this size? No,” former employee Derryl Trujillo says in the film.

Blevins grew skeptical when she started receiving shipments with damaged leggings — including wet pairs that she described smelling like “chlorine and death.” On Facebook, more customers were posting about how their LuLaRoe clothing was ripping on the first wear.

Sources in “LuLaRich” say it was emblematic of larger issues  — like inexperienced leadership and growing too big too fast, which led to shoddy production.

Headquarters of LuLaRoe in Corona, California on December 9, 2017.
Headquarters of LuLaRoe in Corona, California on December 9, 2017.
Alamy

“It was like flying the plane while you’re still building the plane. And you don’t even know how all the pieces of the plane work. And you don’t even know how to fly the plane. You’re not a pilot,” said Sam Schultz, DeAnn’s nephew and former employee. He was hired to produce company cruises and retreats where acts like Katy Perry and Kelly Clarkson performed.

On one cruise for top sellers, Blevins complimented a fellow consultant on how good she looked in a swimsuit. “She said she had gotten ‘the weight loss surgery’ in Tijuana,” Blevins recalled. “She called over a mentor leader who told me all about it.”

According to former consultant Courtney Harwood who appears in “LulaRich,” DeAnn pressured top performers to travel to Tijuana and undergo gastric bypass surgery performed by her own doctor.

For Blevins, who was growing wary of a culture that was similar to religious fanaticism, it was another reason to defect. “I was like, ‘How do I get away from this conversation? Do you really think I need [the surgery]?’. That whole trip was very culty.”

Kimbrough believes DeAnn was feeding off other women’s money, hard work — and their adulation. “[DeAnn] was able to come up with a recipe to have people groveling at her feet. I give them credit for it because it happened for a long time, and they made damn good money.”

Eventually, there were more consultants than interested buyers. The market was too flooded  to turn a profit.

And the lawsuits had started pile up — numerous ones over copyright infringement, claiming LuLaRoe stole artwork to print on leggings. A 2017 class-action lawsuit challenged the company’s return policy, with customers alleging the leggings were poor quality. The brand was also sued by a former supplier  over unpaid bills

As morale started to wane, the brand implemented a policy where consultants could send back stock for a  refund of their wholesale costs. The change led to an exodus.  “I believe LulaRoe paid over a hundred million in refunds during that time,” Blevins said.

LulaRoe leggings.
LulaRoe leggings.
MediaNews Group via Getty Images
LulaRoe clothing.
LulaRoe clothing tags.
MediaNews Group via Getty Images

She added that the cancellation of that policy, in late 2017, led to her breaking point because she couldn’t handle people on her team saying they were going to lose their homes if they couldn’t get refunds.

In 2019, the attorney general of Washington state filed a suit against LuLaRoe saying it was a pyramid scheme that bilked thousands of people out of millions of dollars. The case was settled in 2021, with the brand paying $4.75 million.

When all was said and done, Blevins shelled out over $78,000 for inventory and sold about $83,000 — a $5,000 gross profit. She earned about $65,000 in bonuses for signing up other women, something 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 purchased a new house and matching Chevy Tahoes for her and her husband — all to keep up appearances and look successful on the LuLaRoe food chain, and because she believed the money would keep rolling in. 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 tearfully says in the series.
Consultant Ashleigh Lautaha, who left the company, says in the doc that she got so wrapped up in the LuLaRoe culture that she only had time for either her family or her job. Her marriage broke up.

“The company got bigger than [the Stidhams], and what they could keep up with,” co-director Willoughby Nason said of the couple. “They were putting out fires left and right.”

But she also sees how desperate women got caught up in the drive for success.
“There was a corrosive element of greed that was beyond them.”



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