To say the bloom is off the LuLaRoe rose seems like an understatement. The multi-level marketing company was once worth an estimated $2 billion. Although there isn't any word about how much the company is worth now, the bad press keeps rolling in.
On Sept. 10, for example, Amazon Prime Video debuted the “true-con” docuseries LuLaRich, featuring horror stories from former LuLaRoe participants. “It seemed too good to be true, and it was,” one interviewee says in the series.
The docuseries also features commentary from the company’s cofounders, DeAnne and Mark Stidham. “There’s humanism in Mark and DeAnne’s story, just as much as there is in the victims.’ Because everybody wants to become a billionaire—but all that glitters isn’t gold,” co-director Jenner Furst told Variety last month. “Sometimes that gold can be handcuffs. And sometimes you can go to jail chasing that gold.”
The company lost nearly two-thirds of its consultants between 2017 and 2018, according to a top LuLaRoe leader’s estimate.
In November 2018, Business Insider reported evidence that suggested that LuLaRoe’s business was “in peril,” including an “exodus” of the company’s top sellers, dubbed consultants. One leader told the site that she estimated that LuLaRoe had fewer than 25,000 consultants at the time compared to the 77,000 consultants it had in February 2017.
The site also reported that about one-third of LuLaRoe’s best-performing consultants, including some who had been pulling in nearly $80,000 a month by selling leggings and other LuLaRoe merchandise, had left the company since July of that year.
“They always advertise that they are a billion-dollar company,” one consultant told Business Insider at the time. “Well, that billion dollars in goods they’ve sold, people don’t want it. They are trying to return it all right now.”
LuLaRoe paid $4.75 million to settle a lawsuit from the Washington Attorney General’s Office earlier this year.
In January 2019, Washington Attorney General Bob Ferguson sued LuLaRoe. Ferguson accused the company of making “unfair and deceptive misrepresentations regarding the profitability of being an independent retailer for LuLaRoe,” according to a news release from his office.
In the lawsuit, Ferguson alleged that the company violated the Washington Antipyramid Promotional Scheme Act and the Consumer Protection Act. He called out the company’s “unlawful bonus structure and unfair refund policy.”
In February 2021, Ferguson announced a resolution to the case. LuLaRoe would pay $4.75 million to settle the case, with $4 million of that money going to approximately 3,000 Washingtonians who were “deceived by LuLaRoe’s business practices.”
The resolution also prohibited the company from operating a pyramid scheme and required the company to be “more transparent with retailers.”
LuLaRoe is still in business with the mission of “improving lives and strengthening families.”
Even with all its controversy and legal issues, LuLaRoe is still in business. In a statement about LuLaRich, the company spoke about its current mission. According to Elle, the company said, “We continue to bring greater focus to our mission of improving lives and strengthening families through the principles of entrepreneurism while continuing to educate small business owners about the opportunities found in personal responsibility and individual choice.”
Meanwhile, the company does feature an Income Disclosure Statement on its website. It says that the average LuLaRoe retailer’s gross profit was $10,073.41 for 2020, while the median gross profit for retailers was $1,444.65. More than half of the retailers earned less than $5,000 that year, with 16.7 percent ending the year with losses between $1 and $4,999. Only 2.9 percent of the retailers earned more than $75,000.