LuLaRich (LuLaRoe) (2021 series)
LuLaRoe is a 2021 four-hour documentary series by Amazon that was released today.
10 out of 10 stars. This should be required viewing of every Mormon and every woman. The power in this documentary is in the video clips that show Deanne and Mark Stidham lying and the online interviews that show their victims and co-conspirators. But what will stay with me is 1. a Mormon mom (Deanne Brady Stidham) telling her employees that their job is to give their husbands a blow job every day to keep them happy and to get thin from surgery so they look good in the clothes; and 2. a Mormon dad (Mark Stidham) calling thousands of women lazy, whiny, fat, and worthless human beings because they stood up to his lies and called him on his bullshit. (Please excuse the language.)
Deanne and Mark Stidham's Reselling Business
Deanne Brady Stidham started her home business by buying surplus dresses from a local dress shop and reselling them in her home at dress parties. At that point, she was a reseller. Then one of Deanne's daughters (they have 11 children) wanted her to design a maxi skirt. Deanne did and added it to the line of clothing she was selling at her dress parties. They sold and they sold well. At the time, Deanne's husband Mark Stidham was buying bolts of fabric to keep his wife's clothing business going.
2012: Formation of LuLaRoe Inc.
In 2012, Deanne and Mark Stidham formed LuLaRoe Inc as a multilevel marketing company. There are federal and local guidelines for multi-level marketing companies. Deanne and Mark ignored them all. Their greed got the better of them. They were a devout Mormon couple with 11 children to feed, so they decided to make a pyramid scheme in which they would do no work and collect money. At the top of the pyramid were Deanne, Mark, and their 11 children and relatives. Below them were all the women, mostly mothers, they recruited to sell their leggings and dresses.
The sales pitch was that this was a sisterhood of women that were young mothers with fashion sense who wanted to work from home and support their families while spending more time with their children. The first thousand recruits posted their inventory on FaceBook and talked about the comradery. These videos went viral and more women signed up underneath them, making another level of the pyramid.
The buy-in to become a consultant for LuLaRoe was $5,000 to $10,000. The consultants couldn't choose the patterns or garments, only sizes and were sent blind boxes of inventory to sell. They went online and displayed their clothes on FaceBook Live and actually sold their products. But the money they made from sales was less than they were spending to keep their businesses afloat. They were losing money. It was the bonus checks from recruiting where they were making hundreds of thousand of dollars to millions of dollars. That's a pyramid scheme and it's illegal.
By 2016, they'd made more than $70 million and built a corporate headquarters in Corona, California. They'd gone from 50 consultants to 10,000. No more than 3,000 garments were made from any print fabric and so this created an artificial exclusivity to their garments.
By December of 2016, they'd jumped to $1.3 billion in profits and 60,000 consultants. Women were waiting in a queue to join and they were borrowing the startup fee to get in. But within headquarters, the company was crumbling. LuLaRoe designs were supposed to be original. Mark Stidham demanded that the designers each put out 130 new designs every single day. He encouraged them to do this by stealing images from Google, changing them by 20%, and putting them on various colored fabric. This is illegal and is considered copyright infringement. It also created issues with quality when some of these prints were inappropriate to be worn on the lower body (items looking like penises next to women's crotches).
Gaslighting Employees
When consultants began complaining, Deanne and Mark Stidham immediately began gaslighting them, telling them it was in their head and there were no issues with the quality of the garments, even when images of leggings with penis-like prints in the crotch began surfacing by the thousands. Deanne and Mark also began heavily implementing a patriarchal structure within the company. Deanne was telling the consultants to give their husbands blowjobs every day and to recruit their husbands into the company so it would be a "family business". The women did this only to then be excluded from the businesses that they'd created while Deanne and Mark now addressed their husbands as the owner/consultant of the business. Mark at many points refused to even speak to the women who had made him rich. When he did, he used derogatory names and adjectives to describe them.
At the same time, Deanne began demanding that the women consultants get gastric sleeves to make them skinny and she set them up with appointments at a clinic in Tijuana, Mexico for the surgery. If they refused, Deanne and Mark Stidham would cancel their contracts and they'd have to fly to California to beg Deanne and Mark to let them back in. :0
Most of what had sold women on LuLaRoe was that the clothes were made for fat women. By that I mean normal looking women, not the twig models that fashion designers make us think we're supposed to look like. But once the business took off and Deanne and Mark Stidham were millionaires they'd become used to spending $1 million every week and demanded their consultants continue to bring in recruits. They attributed any lack of recruitment or sales to the consultant being "too fat" or "too lazy", not to the fact that there were 60,000 other consultants selling to and recruiting from the same limited number of customers.
When someone left the company, they ostracized them and declared that no one could speak to that person. If anyone did, their business was closed. This led to a level of ear within the company that these women and their children would suddenly be homeless on the whims of Deanne and Mark Stidham.
LuLaRoe Garments Stored in the Parking Lot
By December of 2016, with over 60,000 consultants, LuLaRoe had no room for inventory. They were inadequately staffed and shipments were taking awhile. They began storing their garments outside in cages where they were subjected to rain, dirt, animal droppings, and sun damage. They shipped these garments to their consultants who immediately asked to return them. Some of the garments had holes in them from shoddy sewing. LuLaRoe took the returns, but refused to refund even though they had a 100% buyback policy.
LuLaRoe Defectives was a FaceBook group that started out of defiance against Deanne and Mark's tirades about their products not being defective. It included photos of defective garments and the cages of inventory being stored in the parking lot of LuLaRoe Inc.
2017: Trying to Avoid Prosecution by Cutting Bonuses
By 2017, multiple people within LuLaRoe had voiced concerns over the company being a pyramid scheme. Consultants were losing money and going bankrupt. The company responded by drastically reducing the bonus checks from recruitment which was how the consultants were making money. In fact it was the only thing they were making money from. A typical check for a beginner was $6,000 a month. These were reduced to $800. That's an 87% pay cut. Deanne and Mark Stidham (and their children) kept the rest. The money was still there, but Deanne and Mark claimed this was to avoid prosecution for being a pyramid scheme.
This was the first mass exodus of consultants from LuLaRoe.
June 2017: Buyback Policy
From the very beginning, LuLaRoe's buyback policy was that at any time, with no expiration date, you could return 100% of your inventory back to LuLaRoe and get 100% of your money back. In June of 2017, they printed this policy publicly to encourage more recruits after the first mass exodus. It worked. Thousands of women signed up to sell LuLaRoe amidst the criticism that they were a pyramid scheme. In that single month, LuLaRoe paid over $100 million in returns/buybacks.
By September, they cancelled this policy and although they accepted the returned products, they refused to refund. In fact, they gave $0 in refunds. This is what started the mass lawsuits against LuLaRoe.
Mark and Deanne Stidham had a fleet of Mercedes, homes, a private jet, and other luxuries. They were also hiding cash in multiple LLCs. Every decision they made was to make them more money. They had long since lost any interest in the women they were supposedly helping, women who were now struggling, who were losing their homes, had maxed out their credit cards, were heavily in debt, and were forced into bankruptcy.
Oct 2017 First Lawsuit: Breach of Contract
The first lawsuit came from a young mother who had miscarried from the stress of working for LuLaRoe. She was broke, heavily in debt, and in danger of losing her home. In addition, she'd returned all of her inventory to LuLaRoe and they still hadn't paid her for it. So she asked a friend, who was an attorney, to file a class action lawsuit. That attorney was Kelly Purcaro of New Jersey. Kelly filed a breach of contract lawsuit, because LuLaRoe said they would pay for the returns and didn't, and set up a website for a class action lawsuit against LuLaRoe. Complaints began pouring into the site by the thousands.
Nov 2018 MyDyer Lawsuit
MyDyer was a Chinese company doing business in the US that was supplying LuLaRoe with garments. The CEO of MyDyer, Daniel Kang, was close friends with Mark Stidham. They purchased and raced $1 million cars together. But Deanne and Mark Stidham owed MyDyer more than $49 million dollars and Kang was pissed. He filed a lawsuit against the Stidhams and a lot about the company was revealed in those documents.
LuLaRoe had been hiding money in LLCs to protect it from litigation. In one month alone they formed 17 LLCs for the sole purpose of hiding cash.
This was the second mass exodus from LuLaRoe. Some women were owed more than $100,000 in back bonuses and refunds that were never paid.
Jan 2019: State of Washington vs. LuLaRoe Inc.
The next lawsuit filed was the big one, the State of Washington against LuLaRoe Inc. The Attorney General of Washington had amassed thousands of pages of evidence against Deanne and Mark Stidham that they were operating a pyramid scheme. One consultant was given $1.4 million from recruitment. Legal documents provided by the State of Washington showed that consultants had actually lost money in sales and made their only income from recruitment bonuses, clearly establishing LuLaRoe as a pyramid scheme.
They outlined all of the federal and state laws governing multi-level marketing programs that Deanne and Mark Stidham had flat out ignored.
This was the third mass exodus from LuLaRoe and resulted in the company plummeting down to 18,000 consultants or retailers. Deanne and Mark responded by publicly insulting every consultant who left them. The women who had made them billionaires were now "lazy", "depressed", "ignorant" "drama queens" who couldn't get jobs elsewhere. The ones who remained were having marital and financial troubles. Many lost their homes, their husbands, and custody of their chlidren. Between 2016 and 2019, over 100 LuLaRoe consultants filed for bankruptcy.
Feb 2021 Settlement for $4.75 Million
In February of 2021 LuLaRoe finally settled the lawsuit against them by the State of Washington. They paid $4.75 million which was next to nothing from the billions they'd made, but the State of Washington had limited jurisdiction over a California corporation.
They were banned from practicing many of their illegal policies. They responded by slashing their startup costs by more than 90% to encourage consultants to sign up.
10 out of 10 stars. This is one of the most vile corporations to ever do business in this country. Shame on them. And shame on anyone who would recruit into this culture that demeans and abuses women.
daniel kang, deanne brady stidham, deanne stidham, lularich series, lularoe, lularoe inc, lularoe pyramid scheme, mark stidham, mydyer lawsuit
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