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Visit my eBay store. Sign up for newsletter. Search Store. Items On Sale. Store Categories. Store home. Vinyl , LP, Album, Stereo. Shipping and handling. The company's service department was "bombarded" with calls from women planning to go out of business as well as those who had already jumped ship and were waiting on refunds, he said.
Trujillo said he spent many hours in the company's service department taking calls from women pleading for money they were owed by LuLaRoe.
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The company's top brass wouldn't give him any answers as to why the refunds were delayed for months on end, he added. A woman on the line was begging for the refund because she needed to make a mortgage payment. Around this time, lawsuits started piling up against LuLaRoe, attacking its business practices and accusing the company of copyright infringement for the patterns displayed on its clothing.
Two copyright suits have been settled; three others remain open. One suit, which accused LuLaRoe of being a pyramid scheme , is in arbitration. LuLaRoe's top performers were summoned to Phoenix for an emergency meeting in the summer of They had 48 hours to get there. At the meeting, LuLaRoe's founders, DeAnne and Mark Stidham, said they were seeing signs of a slowdown in profitability among new consultants.
The Stidhams asked for input on what was going on, and wanted to brainstorm ways to improve profitability. Almost exactly two years later, in August , the profitability problems had infiltrated even top sellers, and the issue had reached a boiling point. Mark Stidham had a call with the company's highest-performing sellers, and it turned contentious. Stidham told sellers to "charity out" prints that wouldn't sell — in other words, they should give them away free or at a discount. Three sellers described Stidham as "yelling" on the call. Some sellers called the clothing prints "horrific" and "ugly" and said business was in "decline" and "getting worse and worse.
Another added: "We are being blunt because we are truly concerned. We care, our lives our built on this company. And we are scared. Truly worried and these answers are a slap in the face. As the company's top performers flee in droves, LuLaRoe founder DeAnne Stidham has insisted publicly at meetings with consultants and in Instagram live videos that everything is fine.
She urges sellers to trust her and to buy more goods, according to several hours of recordings viewed by Business Insider. Stidham has made vague promises about new products in the pipeline in response to sellers' concerns about inventory shortages. Everybody's so excited. In the same video, she chalked up the speculation surrounding LuLaRoe's business to the work of "trolls. Right now she is on a cruise, flaunting her wealth in the faces of the people in the bread line," the person said, referring to a recent video that Stidham had posted from the Caribbean island of St.
A lawsuit filed against the company last year, which is in arbitration, alleged that, with LuLaRoe's riches, DeAnne and her husband, Mark, have "lavished themselves with millions of dollars in luxuries such as expensive international vacations and exotic supercars. Attorneys representing the Stidhams denied the allegations, writing, "LLR's success is built on tremendous demand by the consumers who buy its products. Mark Stidham owns a collection of expensive cars, including a rare Koenigsegg Agera RS, which, in , set a record to become the world's fastest car.
Stidham has displayed his cars at company events, according to former consultants. High-ranking LuLaRoe leaders were encouraged to show off their wealth on social media with the hashtag becauseoflularoe. The strategy worked, according to several consultants. These top sellers showed off their "lavish lifestyles" involving frequent vacations, personal assistants, and new homes, primarily on Facebook and Instagram, she said.
Meanwhile, former consultants like Mason say they are growing increasingly worried that they may never see their refunds. LuLaRoe said in a statement after the publication of this story that it has a "comprehensive and efficient system in place" to manage the process of consultants cancelling their contracts. According to sources, dozens of consultants are giving up on seeking refunds from LuLaRoe and trying to sell their goods to consignment shops and liquidators at steep discounts. At least 70 people associated with LuLaRoe have filed for personal bankruptcy in the past two years, according to court filings.
Jill Domme is one of them. LuLaRoe leaders encouraged her to post pictures of it on Facebook and use it as a recruitment tool, she said. Months later sales dried up. Domme's RAV4 was repossessed in April. She's now working full time and has picked up a second part-time job on nights and weekends to pay for her bankruptcy attorney. Her husband called LuLaRoe in August to beg for the check ahead of their year-old son's latest surgery related to the rare genetic disorder Angelman syndrome, which afflicts both of their children.
The company refused to tell him when it would release their check, the couple said. She told Business Insider she needs to buy things for her children that insurance doesn't cover, such as a seat attachment that helps her year-old daughter lower herself onto the toilet and a bench for their shower. Are you an insider with a story about LuLaRoe? Contact me at hpeterson businessinsider. World globe An icon of the world globe, indicating different international options.
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LuLaRoe is in turmoil. It made its name producing limited quantities of brightly patterned clothing and selling it, sight unseen, to "consultants.