Clothing Sales Company LuLaRoe Faces a $1 Billion Lawsuit

You might recognize LuLaRoe’s colorful clothing from your Facebook feed. The company encourages their “consultants” to sell their dresses and leggings to make money in their multi-level marketing plan. But now, The Press-Enterprise reports that LuLuRoe is at the center of two federal lawsuits seeking $1 billion in damages due to their business practices. Founded in 2012 by Deanne Brady and Mark Stidham, a wife and husband team, LuLaRoe is based in the U.S. as a designer/seller of women’s clothing. Its major distribution chain consists of a multi-level marketing model for a sell-from-home/sell-online concept.

Fortune.com identified that consultants have complained of paying high fees to get started with the company while reporting that the turn-around time for receipt of product, in some instances, took months. They also noted that some of these individuals complained of receiving damaged merchandise. CEO Mark Stidham was quoted by Fortune.com as having responded to this issue in an internal email.

Further allegations were noted with the pending lawsuit, which is referenced in a link provided here. Press-Enterprise identified that legal representation for the complainants provided comment regarding their current state of personal financial affairs, as it related to the suit. With respect to the $1 billion-lawsuit, LuLaRoe has been quoted, stating that the allegations are “…baseless, factually inaccurate and misinformed.”