As the holiday season kicks off, LuLaRoe, a California-based marketing company for women’s clothing, has announced that they plan to permanently close a warehouse in Corona, California that employs 167 people, only five days before Christmas.
This is a result of quite a history of controversy. If you’re late to the game, the company known for comfy clothes (leggings, specifically) has been through multiple lawsuits as a result of accusations over scamming customers in a “pyramid scheme”.
According to the reports, the company lures shoppers into becoming “Independent Fashion Consultants.” The goal is to invest in the company and sell the clothing products for a profit. LuLaRoe supposedly promises refunds to their consultants for unsold merchandise, however, this is not the case.
Courtesy: @momneedsafriend Twitter
In January 2019, Attorney General Bob Ferguson filed a lawsuit and explained how “many Washingtonians lost money and were left with piles of unsold merchandise and broken promises from LuLaRoe.” These allegations go all the way back to 2017 when they supposedly made a whopping $2.3 billion off their products.
In 2018, the company’s CEO Mark Stidham was facing a $49 million lawsuit and denied the claims that they were sabotaging customers. Stidham commented that these claims were “nonsense,” despite the heavy number of testimonies.
Courtesy: Pinterest
Going back to the present issues, LuLaRoe announced their current plans to shut down the California warehouse on Oct. 23, but this isn’t the end of the brand. They also reminded the public that they have other warehouses located in Blythewood, South Carolina and Fontana, California.
The allegations continue as their former supplier Providence Industries is suing LuLaRoe for $63 million for claims of unpaid bills.
The deciding spokesperson ensured that this decision, although necessary, “was not made lightly” and that the affected employees have received connections with new staffing agencies. This still is a heavy setback for all parties involved, however, especially since the layoffs are scheduled right at the end of 2019. As far as LuLaRoe’s current plans for a “bright future” go, the company is still offering their consultant positions to anyone they can get their hands on… in exchange for $499.
To get the inside scoop on what it’s like to be an “Independent Fashion Consultant” I gave it a little bit of sneaky investigating with a Google search and read into some insights.
On GlassDoor, below are a few examples of reviews and ratings from past employees:
- Overall company rating: 2.5/5 stars
- Recommend to a Friend: 31%
- Approve of CEO: 47%
Some of the reviews themselves were actually positive, like this one:
Review #1:
Title: “Independent Fashion Consultant”
- Overall rating: 5/5 stars
- “I have been working at LuLaRoe full-time for more than a year.”
- Pros: “I meet amazing people, work for myself, and do things that I enjoy every day!”
- Cons: “I work a lot and you have to have drive and self-motivation to make it in this industry. It is not an easy job.”
But then you get to this next one, which I might add is right below it, laughably:
Review #2:
The writer of this review is pretty clear from the title they choose: “Don’t do it.”
And now if you really think you need to see more to get the full picture:
- Overall rating: 1/5 stars
- “I worked at LuLaRoe full-time for more than a year.”
- Pros: “None, seriously not a single one.”
- Cons: “Everything, if it sounds too good to be true it probably applies here.”
Courtesy: Giphy
This next review is a little more detailed and gives evidence that correlates with the scam testimonies:
Review #3:
Title: “Highway Robbery”
- “I worked at LuLaRoe for more than three years.”
- Pros: “To meet other fashion consultants and customers primarily via Facebook.”
- Cons: “The owner/operator of the corporation set their retailers up to fail with poor quality unsellable clothing, over-saturation of the market with more retailers than there was demand, providing very little, if any, guidance or training, making up the rules as they went along causing many retailers to go out of business and in some cases they lost assets or had to file for bankruptcy.”
- Advice to Management: “Be honest and upfront about how little you knew/know about the business you were getting into. You ruined the lives of thousands of families and ruined the credit of thousands more by being greedy while peddling religiously. Being associated with your company was a horrifying experience for almost every retailer I’ve come in contact with.”
Courtesy: Racked
Finally, this reviewer gives insights into a middle-ground experience with the company:
Review #4:
Title: You can make money, but an existing social media following helps!”
- Pros: “Set your own hours” and “No limit to the income potential.”
- Cons: “24/7 work environment. High cost of entry. Hard to move certain prints. No ability to select popular prints leading to consultants being stuck with hundreds of unpopular and harder to sale prints. Lots of consultants selling at extreme discounts makes it difficult to gain traction. MLM structure makes it difficult to succeed if the wrong sponsor is chosen.”
- Advice to Management: “Require sponsors to provide additional training. Provide additional information to prospective consultants on how to choose sponsorship. Lower the cost of initial entry into the company. Allow consultants to sell at a discount more frequently to move more inventory.
Now, while we wait to find out the future of LuLaRoe, we can also wonder if any of the companies offering “Brand Ambassador” opportunities all over Instagram could end up at a similar fate.
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