Most people probably have only a vague awareness of what LuLaRoe was. The company was famous for crazy prints and modest styles that fit a wider variety of body types than traditional women’s retail. Eventually the brand became associated with poor product quality and an army of stay at home moms losing tens of thousands of dollars they had hoped would be an investment in their family’s future. The docuseries LuLaRich on Prime talked to the company’s founders, staff, top sales people, and other women and families whose lives were damaged by LuLaRoe.
Here are some of the most shocking bombshells to come out of the doc:
The Family
LuLaRoe was founded by married Mormon couple turned President and CEO, DeAnne Brady and Mark Stidham. The couple has 14 children and many of their family members were hired to for high-level positions in the company regardless of whether they had any qualifications. Mark Stidham himself says the couple believe in the Mormon doctrines that we are living in the end times and that the world is fair for everyone. These two beliefs would make it pretty easy to take advantage of people who are more vulnerable than you. It could also lead you to be a poor steward of environmental resources, as you would believe humans don’t need Earth to be inhabitable for much longer. We can see the impact of these values throughout the series.
DeAnne’s mother was an anti-Equal Rights Amendment activist named Maurine Startup. Maurine wrote a book called The Secret Power of Femininity: The Art of Attracting, Winning, and Keeping the Right Man for You. Evident in DeAnne’s mannerisms and the couple’s business strategy, the book promises that women will be happy and loved if they perform traditional gender roles and will be unhappy and lonely if they do not. One LuLaRoe demonstrator alludes to DeAnne telling her she needed to give her husband daily oral sex to keep him happy… so she could continue buying LuLaRoe inventory.
The Cult
LuLaRoe has a lot in common with a charismatic church or a cult. DeAnne Brady is so energetic and obsessed with performing femininity that it almost seems like watching a drag show. Mark Stidham comes off as a greasy wannabe Mormon preacher whose values may even extend to white supremacist thinking: during a speech shown in the doc, he tells the audience that the world is a meritocracy, which is the reason “we” became “masters of the globe”. The company as a whole pushes its staff and independent distributors to appear perfect on social media and stay silent about any negative experiences with LuLaRoe.
Officially, LuLaRoe is a multi-level marketing company (MLM). MLMs are controversial because the majority of people who are in MLMs will not ever make money from the scheme. Meanwhile DeAnne Brady, Mark Stidham, their family members on staff at LuLaRoe, and a handful of top salespeople gained an incredible amount of wealth from the families who bought in but never recovered their investment. Some women have come forward to say they lost tens of thousands of dollars trying to make money with LuLaRoe.
How LuLaRoe worked is that independent distributors known as “fashion consultants” (or the misleading “retailers”) sign up with the company and were required to invest a minimum of $5,000 in LuLaRoe inventory they would own and sell at a higher price, keeping their profits. In an MLM, 80% of people have to lose money so that the people at the top of the pyramid can get rich. In 2016 the top .01% of LuLaRoe independent distributors made $150,000 per month in bonuses. That same year the bottom 70% made $0.
And there was a lot of money made by those at the top. LuLaRoe was founded in 2013. In 2014 the company had $9.8 million in sales. In 2017, they had 80,000 independent distributors and made $1.3 billion. By 2018 the company had over 20 lawsuits levied against it. Now, there have been over 50.
The clothing LuLaRoe made wasn’t even the real product being sold. The real product was getting other women to become a LuLaRoe distributor at the $5k buy in. The huge bonuses distributors were being paid came from recruiting more distributors, not from clothing sales.
The Victims
LuLaRoe’s independent distributors are mostly women. They also tend to be mothers, from poor backgrounds, and white. Many were military wives. At its peak, LuLaRoe had 80,000 distributors. MLM expert Robert Lawrence FitzPatrick answers a frequently asked question about LuLaRoe in the doc when he says “Why did people join? They didn’t join. They were lured in.”
Earning potential in general is capped for women with children, as someone needs to be available to prioritize the needs of their kids above their career and that almost always falls on the mother. Few jobs offer both good pay and flexible hours, and LuLaRoe promised the best of both worlds. The recruited women were promised “full time income for part time work” as well as a community of other women who were all using LuLaRoe to earn money for their families. Cultural ideas about how the work of raising children isn’t “contributing” to society or even to their own family as much as making money would were used to guilt women into investing in LuLaRoe inventory.
The highest earning LuLaRoe distributors became the most visible on social media. This is both the nature of LuLaRoe and social media. Remarkable or inspiring posts will get shared more widely by the algorithm than posts that might be more truthful or informative. A social media post about a poor stay at home mother who is now earning $30,000 a month is going get significantly more engagement than an upper middle class distributor doing LuLaRoe in her spare time and not making much in sales at all. Distributors were asked to share “sob stories” about their lives before LuLaRoe in contrast with the luxurious life they were later afforded by the company. This means that women being recruited to join LuLaRoe didn’t see the most common examples of what working for the company would be like, they saw only the most exceptional cases that would be impossible for them to replicate.
The company’s independent distributors aren’t the only people LuLaRoe victimized. One supplier sued them for $49 million after the company fell months behind in paying them. They accused DeAnne and Mark of hiding money in LLCs so that they wouldn’t have to pay what they owed. LuLaRoe countersued for a billion dollars.
The Products
One designer interviewed in LuLaRich said she was tasked with creating 100 patterns a day. These patterns would appear on leggings and dresses, some with disastrous results linked to the lack of care that went into production. For instance, some of the patterned leggings looked comically vulgar when worn. Other products arrived to distributors wet and reeking of mold. The clothing also became infamous for the poor quality and the ease with which holes appeared in LuLaRoe leggings.
Since 2017, LuLaRoe’s Better Business Bureau rating has been an F.
The Financial Abuse
LuLaRoe told their independent distributors that there was no limit on the amount of income they could earn. They did this long after the company experienced exponential growth and it became apparent that there are simply not enough people on planet Earth for the new recruits to be able to make the amount of money early recruits had made. This information was obscured by LuLaRoe’s culture of toxic positivity and “hustle”.
One value touted by LuLaRoe was the idea of “retiring” your husband. On the surface, making enough money that your spouse doesn’t have to work seems like a good thing. However, rather than being benevolent, it’s likely this idea was promoted because it would make entire families dependent on LuLaRoe, decreasing the likelihood that distributors would leave the company. When an individual rather than a company tries to make you dependent on them so they can control your actions we call it financial abuse.
For instance, Hugh Hefner controlled his “girlfriends” at the Playboy mansion by paying them an “allowance” of $1,000 per week that was supposed to be spent on clothing, salon visits, tanning, and all the other upkeep it takes to be a woman in the public eye. Hef would also lease luxury cars for the women. The cars were always leased so that the women would not be building wealth they could use to leave the mansion and the cars were always luxury so that the women couldn’t afford the payments on their own. The point was to keep them trapped in a gilded cage. Holly Madison wrote in her tell-all about life at the mansion, “Everyone thinks that infamous metal gate was meant to keep people out. But I grew to feel it was meant to lock me in.”
LuLaRoe encouraged women to spend their checks on high-end clothing and flashy items they could show off on social media with the hashtag #becauseoflularoe. This kept distributors dependent on the company because they weren’t saving their income. It also marketed LuLaRoe to other women who saw this lifestyle as aspirational and attainable and would sign up as distributors themselves. With a $5k buy in of course.
A particularly bonkers part of this doc is the fact that DeAnne Brady used to tell her independent distributors to go to Tijuana to get weight loss surgery at a clinic called “Obesity Not 4 Me”. Like lots of religious royalty (she is a descendent of Joseph Smith’s older brother), DeAnne Brady is obsessed with thinness. She went so far as to have her sister personally drive women to a doctor across the Mexican border so that they could get gastric sleeve surgery. She thought thin saleswomen would recruit more distributors. She also pocketed $1,000 from each woman she sent to the clinic.
The Gaslighting
LuLaRoe would consistently deny problems within the company existed, even when there was objective evidence that the problems existed. The allegations would then be turned around until the complainant felt something was wrong with them rather than the company. Because everyone’s income depended on those below them continuing to work, everyone was incentivized to be dishonest about how easy the work was and how much money they made. People were also discouraged from talking openly to each other so they would not realize that so many of them are having the same experiences.
A big component of LuLaRoe training and sales was “hustle culture”. The idea is, the more passionate you are and the more hard-working, the more money you will earn. This goes against the objective reality of MLMs, which is that it is mathematically impossible for the people at the bottom of the pyramid to make money. LuLaRoe even brought in a speaker to one event who told the women that they need to get out of a “victim mindset”. The message was clear: if you aren’t successful at LuLaRoe it is because something is wrong with you.
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Another method of gaslighting LuLaRoe used was employing the language of feminism while not living up to the actual values of feminism. The distributors were told over and over that becoming a LuLaRoe distributor was “empowering”, so if the women’s own experiences didn’t match up to the promise, they wondered what was wrong with them that they didn’t feel empowered rather than paying attention to the one-sided relationship that was benefiting LuLaRoe. Empowerment, feminism, and girlbosses became a scapegoat for all that was wrong with LuLaRoe rather than the predatory company itself.
Because distributors were told to always be positive about their experiences with LuLaRoe and that money comes from hustle, women who were not making money felt too ashamed to speak up. Complaints were discouraged by DeAnne and Mark and like Sc*entology and other cults, if someone left LuLaRoe, you were supposed to sever your relationship with them. It took years for distributors to feel confident enough to be vulnerable and truthful with other distributors about what they were experiencing at LuLaRoe. After a few brave people started speaking out, more and more people realized they had also been defrauded. The result of this snowball effect has been more than 50 lawsuits and the docuseries itself.
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There’s a lot more to this company’s predatory history. You can watch it all on LuLaRich streaming now on Prime.
