‘It’s very culty’: the bizarre billion-dollar
downfall of fashion company LuLaRoe
LuLaRich, the Amazon docuseries on a multi-level
marketing company, is a four-part dive into greed and faux-girlboss ideals
Adrian
Horton
@adrian_horton
Wed 15 Sep
2021 20.37 BST
https://www.theguardian.com/tv-and-radio/2021/sep/15/lularich-lularoe-amazon-docuseries
Roberta
Blevins first heard about the leggings in the fall of 2015, in a post by a
fellow member of a motherhood-themed Facebook group. They were loudly
patterned, buttery soft, interesting – clothing functional for chasing around
young children, accommodating of changing bodies post-birth, and cute enough to
be socially acceptable outside the home. The woman who advertised the leggings
said she bought them wholesale from a company called LuLaRoe, and sold them for
double the price.
Blevins was
intrigued. She was struggling with the alienation of young motherhood and
looking to supplement her family’s income, and LuLaRoe offered an alluring,
soothing promise: sign up to be a retailer, and you could run a successful virtual
boutique out of your home while still being present for your kids.
LuLaRoe
seemed to offer “this built-in community, where I knew I could have an instant
friendship”, she told the Guardian. As Blevins recalls in LuLaRich, a four-part
Amazon docuseries on the beleaguered multi-level marketing company, LuLaRoe
women added her to Facebook groups, texted her, invited her to parties that
doubled as fashion sales, and showered her with encouragement. By March 2016,
Blevins paid $9,000 to become a LuLaRoe consultant and receive a starter
package of clothing to sell.
At first,
things went well – she was enthusiastic about the clothing, and made money
selling LuLaRoe on Facebook out of her home in suburban San Diego, California.
But Blevins quickly felt the strain of the company’s precipitous growth, owing
to its emphasis on recruiting new “consultants” – people on the “downline”
whose start-up costs traveled up the ranks as “bonus checks”. By the end of
2016, what had started in 2012 as a homespun business selling maxi skirts out
of the trunk of a car by two Mormon grandmothers had reached over $1.3bn in
sales with over 60,000 consultants – and faced lawsuits alleging that LuLaRoe
founders Mark and DeAnne Stidham misled retailers and ran a pyramid scheme.
Over four
episodes, LuLaRich, directed by Jenner Furst and Julia Willoughby Nason (makers
of Hulu’s Fyre, on the spectacular meltdown of the scammy music festival),
surveys the warp speed growth of a company that preyed on millennial,
overwhelmingly white women’s sense of purposelessness, repackaged the fallacy
of “having it all”, and saddled thousands in debt and broken promises while the
company’s top brass raked in millions. The company appealed, said Furst, to the
“middle America millennials who don’t have the same opportunities that their
parents had, who are facing a lot of different struggles, who are susceptible
on one hand to the patriarchal nuclear family structure but then also the pitch
to be a girlboss and to be empowered and to be a feminist who is selling these
leggings”.
Blevins,
like several of the former LuLaRoe consultants who appear in the series, was at
first convinced by the promise of running her own business. The company
hammered home the perks of being not just a LuLaRoe retailer, but a member of a
movement – a “boss babe”, “part-time work for full time pay”, contributing to
household income without going to an office. Or, as Mark puts it to Nason and
Furst in the first episode: “Take your creativity, your passion, your
excitement for life, and here’s a place that’s a pure meritocracy.”
“They saw
me, they’re like she’s bubbly, she’s energetic, she knows how to use social
media, she’s an asset to moving this forward,” Blevins said of the “love-bombing”
grooming process that convinced her to join LuLaRoe. “At that point, I was just
another walking dollar sign.”
Slowly,
inconsistencies began to pile up. Blevins would visit “home office” in Corona,
California, or attend company events, which increasingly took on the feel of
pop religious festivals (corporate events included performances by Kelly
Clarkson and Katy Perry), and Mark would start reciting passages from the book
of Mormon. “I thought we were selling leggings?” Blevins recalled thinking. “It
just seemed strange.” Blevins received an order of merchandise that reeked of
mold; quality was slipping, and some leggings straight-up poorly designed, with
prints that resembled anatomy at the crotch. Now with several consultants
down-line of her, Blevins passed questions up the chain, “and they would give
me an answer that made sense,” she said.
“You reach
up inside the organization [for answers]. You don’t reach outside the
organization for information or to have your questions answered. It’s very
culty.”
Through
interviews with former and current consultants, employees, and even Mark and
DeAnne themselves, LuLaRich takes a bird’s eye view to what Blevins couldn’t
see at the time: the company, allegedly designed to make money not on clothing
but through the unsustainable recruitment of new members, was collapsing under
its own weight. Mark and DeAnne, who married in 1998, trademarked LuLaRoe in
2013, and staffed it with members of their large extended family. In 14 months
from 2015 to 2016, the company grew from $70m in sales to over a billion. The
profits for those who joined early in the company, and whose down lines
flowered into the thousands, were astounding: some in the series claim to have
received bonus checks of anywhere from $20,000 to $70,000 a month.
Meanwhile,
the majority of LuLaRoe consultants struggled to make ends meet – encouraged to
take on debt and saddled with merchandise they couldn’t sell. With a glut on
the market of LuLaRoe consultants, most buckled under the weight. “A lot of
people lost their marriages, their lives were in shambles, people were selling
breast milk for startup costs – are you kidding me?” LaShae Kimbrough Benson,
who started as an administrative assistant at the company’s headquarters in
2015, told the Guardian. “People were taking out loans, all kind of stuff. And
[Mark and DeAnne] knew that.”
The
lopsided margins were by design of multi-level marketing companies –
essentially, pyramid schemes legal under the guise that they’re selling a
product rather than membership – according to experts featured in the series
such as Robert FitzPatrick, author of Ponzinomics: The Untold Story of
Multi-Level Marketing. Legal MLMs have to have a buyback policy, and prohibit
buying new inventory until retailers have sold 70% and have at least 10 new
customers. As Benson and other former employees recall, LuLaRoe more than
skirted this line. “We always had a quota to hit,” said Benson, who eventually
worked for the “onboarding” team for new members.
The
Stidhams maintain that LuLaRoe, which is still in business (though startup
costs are down 90% and the commission structure altered), was never a scam, but
a meritocratic ladder reflective of personal effort and character. The couple
participated in an initial interview with the film-makers to detail the origin
story behind the company and their values of entrepreneurism while maintaining
a traditional family structure; they declined a second interview to
specifically address claims made against the company in 50 lawsuits filed since
2016, as well as some of the more outrageous elements of corporate culture –
that they pressured consultants to get weight-loss surgery in Tijuana and
received kickbacks from the doctor, for example.
The company
instead offered a statement presented at the end of the series: “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.”
“It’s that
dual-edged sword of personal responsibility,” said Furst of the statement.
“That’s what the MLMs feed off of in the first place: if you’re a failure, it’s
your fault.”
Blevins
felt the stigma as she began to lose faith in the company over the course of
2017. The last straw was joining a Facebook support group for ex-LuLaRoe
consultants and “having every little thing that I had ever complained about,
any question I had, all answered”, she said. She read through the posts and
cried.
“There’s a
process of grief that you go through when you leave an MLM,” said Blevins, who
left LuLaRoe in September 2017 and now advocates against MLMs through her own
podcast. “There was a lot of ex-communication, a lot of harassment, a lot of
people telling me I was crazy, or saying ‘You’re going to ruin your life by
leaving.’”
The
internal pressure to stay quiet and avoid “negativity” was something that
dogged many women who participated in the series, according to co-director
Julia Willoughby Nason. “There was just tons of the behind the scenes peer
pressure and bullying, and blowback that these women had already experienced,
and I think that they were very scared of the repercussions if they were going
to have a platform like a multi-part docu-series,” she said.
In
February, LuLaRoe agreed to pay $4.75m to the state of Washington to settle a
2019 consumer protection lawsuit alleging the company operated a pyramid scheme
that made “unfair and deceptive misrepresentations regarding the profitability”
of being a retailer. Through its collation of first-person testimony, LuLaRich
offers an “invitation, tacitly, to attorney generals around the country to do
what Washington did, protect their consumers” said Furst. In the meantime, the
company still promises a “community of lasting love and fellowship” on a
website that pitches “creating freedom through fashion” over a single button:
“Join LuLaRoe.”
LuLaRich is
now available on Amazon Prime
No comments:
Post a Comment