Unless you’ve been hiding under a rock for the past year or so, you’ve probably heard of LuLaRoe. The leggings retailer, once praised for its inclusive sizing and affordable prices, quickly became the target of harsh criticism when customers complained that their leggings had ripped “like toilet paper”. A lawsuit was filed against LuLaRoe on Oct. 23 that said that consultants “are aggressively pressured to continue purchasing wholesale inventory even when the inventory they have is not selling, is unlikely to sell, or is piling up in their garage”. In short, LuLaRoe has been forcing their consultants to continue to purchase clothing to sell even when their current supply is not selling.
The consultants are largely mothers with young children, for whom the opportunity to make money while staying at home has great appeal. These women are encouraged by LuLaRoe to max out their credit cards, and even go as extreme as to sell their breast milk, to continue buying tens of thousands of dollars of unsellable clothing. To add insult to injury, LuLaRoe appears to be running a pyramid scheme, offering rewards such as free cruises and designer purses to the consultants who bought the most clothing, regardless of how much they actually sold.
LuLaRoe claims to allow its consultants to send back unsold clothing for 90 percent of its retail price, but many consultants who tried to send clothing back for a refund got nothing at all. They alleged that the retailer had suddenly decided to change their policy so that refunds would only be rewarded for returns of “certain clothing, purchased at certain times, and from LuLaRoe in a certain manner”, according to an e-mail written received by consultant Stella Lemberg. This policy change has left Lemberg, and many other consultants, with tens of thousands dollars worth of unsellable LuLaRoe clothing. The retailer said in a statement that they changed their return policy due to consultants “abusing the program by returning products in extremely poor condition and providing inappropriate claims”.
Though the retailer prides itself on helping women to succeed, for many consultants the LuLaRoe pyramid scheme proved to be damaging. The business model put the onus on the women to sell clothing, blaming them if items did not sell. In a statement to BuzzFeed News, former consultant Jade Gill said, “the LuLaRoe culture also caused me to have to go on anxiety and depression medication because it was constantly pounded into our heads, ‘if you can’t make this business work, it’s your fault. You’re not putting enough work into it’”. LuLaRoe has failed many people, from the customers whose brand-new leggings ripped to the women who were trapped in their pyramid scheme.