‘The Rise and Fall of LuLaRoe’ speaks with women who fell victim to one of the largest MLM clothing companies
For those of us that weren’t purchasers of intensely patterned leggings in the mid-2010s, LuLaRoe is one of the biggest multi-level marketing clothing companies of all time. It peaked around 2015, when thousands and thousands of hopeful retailers bought into the company with dreams of becoming their own boss. But come 2017, lawsuits and allegations began rolling in from their own retailers, mainly women and stay-at-home moms, about the company being a pyramid scheme. Chronicling this entire story is Buzzfeed News reporter Stephanie McNeal in “The Rise and Fall of LuLaRoe.”
This new discovery+ podcast premiered at #14 in Society & Culture on Apple Podcasts. Only two episodes are out so far, but plenty more are sure to come. Episodes are just half an hour long, featuring expert interviews and first-hand accounts on the inner workings (and consequences) of the company.
MLMs vs. Pyramid schemes
While multi-level marketing companies are legal as long as they comply with disclosure laws and provide customers with an actual product, pyramid schemes are not. And the two models do share a lot of common practices, which can make it difficult for potential customers and retailers (the people buying the clothing in bulk and selling it to friends and family) to differentiate.
That’s what happened to former LuLaRoe consultant Heidi Castellani, who had a successful marketing career prior to becoming a stay-at-home mom. We learn all about her time in LuLaRoe in the first episode of the podcast. Before her first child, she and her husband were both working full time, sometimes even over 50 hours a week. With a newborn, that would no longer work. In 2014, Heidi left her job right as her husband’s job transferred him to New York City, and the couple settled in the Connecticut suburbs.
Going from working full time and being surrounded by adult friends and coworkers to suddenly only being with a newborn baby was a dramatic and overwhelming change for Heidi. She was desperate for a group of friends. So, she joined a Facebook mom group. It was there that she first heard of LuLaRoe when a woman convinced her to buy just one pair of LuLaRoe’s famous “buttery soft” leggings, telling Heidi that once she did, she would be hooked. Well, that woman was right. She went on to join the LuLaRoe Facebook group, and when she saw how many women were posting about the products they were selling, she thought to herself, “I can do that.”
Heidi was one of the first LuLaRoe retailers in the state of Connecticut and quickly became one of the company’s best retailers. She had earned her initial investment back after 3 to 4 weeks, a selling point she used to recruit women to join the company. After just 11 months, Heidi was promoted to a Coach level and was receiving monthly bonus checks of $6,000, sometimes even $10,000. After two years in LuLaRoe, she had 120 women on her team.
Red Flags
But before this, she had suspected that something about LuLaRoe was not right. It was highly suspicious that she was getting paid so much money just as a “Coach” bonus. It was more money than she made by selling their products, that’s for sure. She had also met the Stidhams, DeAnne and Mark, who were the founders of LuLaRoe and Heidi found the company events to be… odd. For one, these events were often extremely poorly run, with not enough food available for attendees and often encouraging their employees to purchase new products. Also, while the company made waves in 2017 for the concert headliners they booked to perform at their events, like Katy Perry and Kelly Clarkson, at Heidi’s first event in 2015, the headliners were the Stidhams young nieces singing church hymns.
In 2017, Heidi decided to listen to the warning bells that had been going off in her head for years. She was going to resign and, through LuLaRoe’s newly announced buyback program, send back the $34,000 worth of inventory she had in her home. She started the process of returning the clothes through the buyback program, and on September 3rd, 2017, she sent in her resignation letter. On September 13, 2017, LuLaRoe announced without warning that it was ending the buyback program.
Between the clothes, the hangers, the racks, the label makers, and the other marketing collateral that she was no longer going to receive any refund for, Heidi estimates she lost nearly $50,000. And she was not the only one who went through this. Thousands of women lost money, although many didn’t lose nearly as much as Heidi did, and Heidi now believes that she was essentially a part of the LuLaRoe cult. LuLaRoe has faced million-dollar lawsuit after billion-dollar lawsuit accusing them of being a pyramid scheme, which the company claims are all baseless. The company has been in rapid decline since then but remains open to this day.
Throughout “The Rise and Fall of LuLaRoe,” you’ll hear from more people like Heidi who were conned into this scheme. You’ll hear from Jo Piazza, author and “Under the Influence” podcast host, who talks about how social media and influencer culture contributed to the success of LuLaRoe. Find this and so much more on new episodes of “The Rise and Fall of LuLaRoe.”
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