BILLION-DOLLAR EMPIRE... OR PYRAMID SCHEME?
MANY WOMEN LOST THEIR LIVELIHOODS SELLING COLOURFUL LULAROE LEGGINGS
Deanne Stidham isn’t the kind of person you might expect to be at the helm of a billiondollar fashion business. She’s a mother of 14 and a devout Mormon with an impressive selection of high heels.
But alongside her husband, Mark, Deanne built Lularoe from a kitchen-table business into a money-making machine.
The couple’s assets include a Gulfstream jet, sprawling ranch in Wyoming and a collection of luxury cars.
Their fortune has been amassed through selling bold, printed leggings emblazoned with everything from images of kittens and
Disney characters to pizza and Halloween pumpkins. For years, Lularoe leggings were found in wardrobes across the US and in 2017 alone, the business earned $3.2 billion.
However, a new Amazon documentary, Lularich, suggests all is not well.
Thousands of women paid money upfront to become consultants and sell the leggings. The minimum buy-in was around $7000, but the documentary claims women invested much more. Lularich says some women were so desperate to be part of the Lularoe culture that they even sold their breastmilk to get the funds they needed.
The company name comes from Deanne and Mark’s three granddaughters Lucy, Lola and Monroe. It started in 2012, when Deanne, now 62, began sewing maxi skirts and selling them at pop-up parties. As demand grew for the skirts, she and Mark also created leggings and built an 80,000-strong army of consultants who sold the garments at a markedup price. Consultants were also encouraged to recruit new people and were promised a cut of the new recruits’ profits.
“I watched my wife shatter glass ceilings … She made hundreds of thousands of dollars of profit in a very short time,” Mark says.
Deanne’s success story was dangled in front of the women following in her footsteps. Their top consultants were rewarded with luxury cruises and concert performances. But the dream has since soured. The business recruited too many consultants and there simply weren’t enough customers to go round. Product quality also fell and customers complained of mouldy or ripped leggings.
An environment that promised empowerment for women quickly turned toxic.
Ex-consultant Courtney Harwood alleges consultants were recommended to undergo gastric bypass surgery to maintain their figure, and advised women to take care of their appearance and their husbands. Courtney bought a new house and car believing she’d make her fortune with Lularoe, but her dream ended as company profits tumbled and legal actions against the business began to pile up. Courtney was forced to file for bankruptcy, and lost her home and marriage.
Roberta Blevins was a hairdresser and mum of two when she discovered Lularoe on a mothers’ Facebook group. She invested about $108,000. She’s now been left with credit card debt.
“A lot of people lost their marriages, their lives were in shambles, people were selling breastmilk for start-up costs – are you kidding me? People were taking out loans, all kind of stuff. And [Mark and Deanne] knew that,” alleges Lashae Kimbrough Benson, who worked at the company’s California HQ.
Despite the approximate 50 lawsuits filed against the business in the past five years and the impacts on former
consultants, the Stidhams stand by their legging empire.
In Lularich, they deftly dodge the fact that this February, the business paid $6.5 million in damages to settle a lawsuit that accused Lularoe of operating an illegal pyramid scheme.
A statement issued on the company’s website days before Lularich aired said its mission “will continue to be centred around helping women all over the world feel beautiful, confident and worthy of the dreams they set out to achieve”.
‘PEOPLE WERE SELLING THEIR BREASTMILK FOR START-UP COSTS’