Millennial Women Made LuLaRoe Billions. Then They Paid The Price.

Elbert helped out in the family candy business and eventually ran a catering company, and Maurine opened a bridal shop — but the couple also had an interesting side hustle. In 1945, the couple founded the American Family and Femininity Institute, dedicated to teaching women that their place was in the home. In 1969 Maurine Startup published a book called The Secret Power of Femininity, which instructs women to, among other things, practice saying “I am just a helpless woman at the mercy of you big, strong men” to catch a guy. The couple turned this work into $300 “Femininity Forums,” sessions where they would teach women how to find a husband. Eventually, Maurine became the California chair of an organization dedicated to fighting the Equal Rights Amendment in the 1970s. (The campaign, led by conservative activist Phyllis Schlafly, was eventually successful — the ERA still has never been ratified by Congress.)

…The lawsuit filed on behalf of 190 consultants in late 2019, Belinda Hibbard v. LulaRoe LLC, detailed what they allege was the ideal LuLaRoe consultant: “Defendants targeted women, stay at home mothers, spouses of active military members, and other groups who had working capacity and some access to credit or savings, but also, generally, a lack of formal business or finance training.”

According to Derryl Trujillo, a former employee who had been hired in February 2016 for LuLaRoe’s retailer services email team in the company’s Corona warehouse, this massive growth along with ineptitude of their mostly family executive team created a disaster. Instead of scaling back though, he told me, the Stidhams kept “growing and growing” the company.

“It was like somebody stuffing their face too much at a Thanksgiving Day table, but they couldn’t stop eating,” Trujillo said.

…She lost friends because she was working 60 hours a week, desperate to make her business succeed.

“I was just in my house, seven days a week,” she said. “And I didn’t want to leave because I always had shipping to do or I always had pictures to take.”

According to Katie, working nonstop was part of the LuLaRoe culture, because your business was what you made it. To her, the implication was clear: If you couldn’t make your business work, you just weren’t trying hard enough. And there was no time for slacking off.

“If you did stop, your [Facebook] group just tanked,” Katie said. “If you stopped for 24 hours, your group, then you had to work that much harder to build it back up again.” The grind was also hard on her family. Her kids complained that she was always in her room or on the phone.

…But while consultants can place orders for styles and sizes of clothes, they never know which prints they will get until they open the box, and no two consultants get the same mix. Shoppers, therefore, will usually join multiple LuLaRoe groups on Facebook to try and find the piece they want because some styles or colors of clothes are popular or rare.

…Because each shipment is a mixed bag, with some pieces highly valued by “unicorn hunters” that sell quickly, and others — because of their size, pattern, or color — that might be really hard to sell, consultants take a risk with each order.

“Which is how LuLaRoe is making money,” Katie said. “You sell 40% of the prints, you keep buying more inventory, but the sell-through just isn’t there. … But you’re still stuck with all the ugly stuff. You buy another box, you sell 10 out of the 30 pieces, you’re still left with 20, you go in and order more. It’s just a constant cycle.”

In addition to this cycle, many LuLaRoe sponsors, according to Katie and other consultants, encouraged their consultants to buy more clothes if their sales were dropping. After all, the more options in size and color, the more potential customers.

…“If I would have a slow month, there was always ‘Well, did you order this many pieces? You know if you order this many pieces you’ll sell this much.’ And it was, ‘Well you only have five in each size. You should really have 10 so your customers have more of a variety to choose from,’” Katie said.

Still, she blames herself for continuing to spend more and more money, and takes full responsibility for her financial choices. But she said she was drawn in by the possibility that her mentors could be right, that she just needed to buy a little more or try a little harder.

…Katie’s popular mentor kept being trailed by other consultants who seemed to just want to be near her. Katie said the leadership conference was empowering and her association with the brand made her feel special.

“I was being independent. I had constantly depended on others for a long time, and here I was, doing something by myself,” she writes.

…Katie said around this same time, the products were becoming harder to sell. Not only was the market saturated with LuLaRoe consultants, the quality of the clothes became hit or miss. Some of the leggings arrived with holes in them, some had a moldy or mildew smell. Sometimes she would open her box of inventory and realize some of the items were completely ruined. When she tried to report the damages to the company, she said she was given the runaround by customer service.

…LuLaRoe was knowingly selling defective products to consultants, and then refusing to refund them. 

…She felt gaslit by promises that she would be getting great new inventory during LuLaRoe webinars, and then none would arrive in her boxes.

“I often compared it to a cycle of abuse,” she said. “Especially with the owners. The launch would go bad…they’d kind of place the blame on us, and we’d all be really, really mad and upset with them. And then Mark would come on [the webinar and] apologize and give this whole teary-eyed speech about how sorry he was, how he did it wrong. And everyone would be like, ‘Oh, that made me cry. It’s so good that they care so much about us.’ And then the next month he’d turn around and do the same thing.”

…The loss of her 401(k) hurt, but her husband has his own and has supported her both financially and emotionally. For those without safety nets, getting out of LuLaRoe could be much worse.

Karyn, the consultant in California, said her debt from LuLaRoe led her to bankruptcy. She was only able to sell around $1,100 worth of product, she said, nowhere close to the initial investment she’d made. She filed for bankruptcy when it was clear she had dug herself into a hole she couldn’t get out of.

…“The amount of guilt I have over the shit I used to sell makes me sick.” “I have learned my lesson and I’m ashamed.” “I felt sick last night working on my taxes. So. Much. Money. I am so embarrassed and ashamed I let myself be so blind.”

Karyn thinks LuLaRoe came into her life at a time when she was the perfect target, and that’s how many women got sucked in.

“I was in a vulnerable place because I wasn’t happy,” she said, explaining she had been frustrated with her career and was looking for a distraction. “There’s a lot of guilt.”

Millennial Women Made LuLaRoe Billions. Then They Paid The Price.

From a shady as F*ck family, a shady scheme preying on isolated and vulnerable women.

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