The MLM LuLaRoe Has Seen Tons of Controversy — Here's Why

Tons of clothing companies have come and gone over the years for all kinds of reasons. The pandemic was a big factor in many of them closing their doors. But for some companies, there was a lot going on behind the scenes that made things difficult, and that's what happened with the clothing company LuLaRoe.

At one point in time, LuLaRoe was everywhere. People loved its leggings, which sported all kinds of over-the-top prints. But over the years, multiple people who've worked there have spoken out about negative experiences they've had. Plus, the company has been in a lot of legal trouble. What happened to LuLaRoe? Here's what we know.

LuLaRoe is a multilevel marketing or MLM company. According to Investopedia, this is a business model where companies use their members or distributors to sell their products. Although this is a legitimate and legal way to run a company, it can be confused with or used to cover up pyramid schemes.

In the VICE documentary Why Women Are Quitting Their Side Hustle: Leaving LuLaRoe, former LuLaRoe employees talk about their experiences with the company. Courtney Harwood speaks about how much money she made in the MLM. When she first saw success, she was easily making five figures monthly. "I was on my way to being a millionaire," she says in the doc.

Courtney says LuLaRoe pushed recruiting much more than selling the clothing and that's a major sign of a pyramid scheme, according to the FTC. The documentary shows that this was the beginning of the end for the company.

At the end of it all, Courtney made a lot of money, but it wouldn't last. In the documentary, we see her packing to sell the house she bought with money she made at LuLaRoe. Because things started to go downhill behind the scenes, different policy changes were made so that the company could save money, and the distributors suffered for it.

LaShae Benson was hired to onboard new distributors. In the documentary, she said, "We were growing so fast. I don't think that the system was big enough."

Yes, LuLaRoe is still around, it's just not as big as it once was. The VICE documentary says that around the summer of 2016, the company was bringing in so many new distributors that the system couldn't keep up and send out the clothing fast enough. Because of this, warehouses began to fill up too quickly and there was no place to store the product.

Instead of slowing down, LuLaRoe began to store clothing outside where the elements could damage the goods. Then, when distributors would get their orders, they would be moldy, wet, or otherwise damaged. They couldn't sell clothes like this, so when they reached out to the higher-ups in the company, they wouldn't get the help they needed. They were just stuck with moldy clothes.

Currently, LuLaRoe has 249,000 followers on Instagram and more than 670k likes on Facebook. Through their website, you can still get in touch with a retailer to buy clothes and even join the company yourself. But the Amazon docuseries LulaRich also talks about the darker side of the company. The company has faced dozens of lawsuits, and women involved with LuLaRoe have even spoken out about being pressured into getting weight loss surgery.

In LuLaRich, LuLaRoe's CEOs, DeAnne and Mark Stidham, were interviewed and talked about their side of the story. According to an interview with Variety, the directors of the docuseries, Jenner Furst and Julia Willoughby Nason, said that the company became a "runaway train" that grew out of control in a way that DeAnne and Mark couldn't keep in check.

You can watch Why Women Are Quitting Their Side Hustle: Leaving LuLaRoe on YouTube, and LuLaRich premieres on Amazon Prime Video on Sept. 10, 2021.