LuLaRoe’s founder, DeAnne Stidham, continues to lash out regarding her multi-level marketing (MLM) empire’s implosion. Recently, I spotted a writeup of a speech she gave her followers–and it’s a doozy. I’ll show you what she said, and why this implosion is important. Today, Lord Snow Presides over a growing consumer risk in the world that governments–including and especially America’s–seem helpless to stop.
(If you’re not familiar with MLM terms, see the bottom of this post.)
LuLaRoe: A Brief Primer.
The market can stay irrational longer than you can stay solvent.
DeAnne Stidham started LuLaRoe just a few years ago. The company quickly became famous on social media for what they called “buttery soft leggings” and shapeless clothing in a wealth of wild patterns and bright colors. In classic MLM style, LuLaRoe hunbots enlisted other women to go sell this stuff to their social-media contacts. Stidham swaddled her pitches in Christianese, like many MLMs do to take advantage of affinity marketing.
LuLaRoe’s barrier to entrance was money. Usually, MLM starter packages run fairly cheap, like USD$50-300. Aspiring LuLaRoe hunbots, by contrast, paid upwards of $5000-10000 or even more for assorted starter packages of clothes. LuLaRoe’s company heads originally kept a close eye on how many hunbots they released into the wild, resulting in waits of sometimes months for applications to be approved.
Hunbots didn’t care. They paid their money and waited with joy. Many regarded the MLM as a perfect way to earn money while staying at home with their kids. In many Christian groups, that’s women’s life dream. Sure, they needed quite a lot of money to get involved (which the huns borrowed, crowdfunded, or financed on credit cards), but a money-back guarantee on unsold stock clinched the deal for them.
But greed will out.
That’s what it does.
Problems, She Has Problems.
Stidham opened the LuLa-gates wide not long ago, resulting in the mass onboarding of many thousands of hunbots. Rapidly, LuLa-huns learned to their grief that the company simply couldn’t keep up with the influx of new shills.
Very quickly, quality issues began popping up like LuLa-mushrooms after rain. When the complaints and refund requests began coming thick and heavy, the company largely ignored them.
However, LuLaRoe also altered that buyback policy, adding insult to injury. Instead of a 100% refund period, LuLaRoe promised to refund only 90% of hunbots’ purchases–and only on purchases made within the past year.
Worse than that, though, Stidham’s decision resulted in a complete saturation of whatever market still existed for overpriced stretchy leggings and shapeless clothes. Even when the clothes were undamaged and the patterns tolerable, even relatively-successful hunbots had trouble selling them in an overcrowded marketplace.
But all that was only the beginning of DeAnne Stidham’s problems.
A Chunka Chunka Burnin’ Lawsuits.
The big news lately about LuLaRoe concerns the lawsuits swirling around the MLM’s leadership. Their main manufacturer, Providence Industries (haha, get it? SO CHRISTIAN!), sued them for almost $49 million dollars. They claimed that LuLaRoe hadn’t paid them for goods received for seven solid months. The company owes over $4M to other creditors too, like UPS.
Further, the lawsuit alleges that DeAnne Stidham and her husband Mark have hidden a lot of their assets in what are called “shell companies.” Providence claims that while the couple took numerous luxury vacations and bought wildly expensive sportscars and whatnot, they were also ran LuLaRoe into complete insolvency.
Like rats on a sinking ship, LuLaRoe shills have been abandoning the company, mostly for other MLMs. One estimate from an insider claimed that LuLaRoe went from 77,000 hunbots in February 2017 to 25,000 in November 2018. More lawsuits from burned huns might follow.
Oh, and the Washington State Attorney General’s Office might be investigating LuLaRoe on behalf of sellers in that state.
LuLaRoe’s big marketing hype centers around how totally Jesus-y the company is. Stidham herself constantly refers to Christian ideas. Bloomberg quotes her as saying she wants her company to “bless people’s lives.” She points to her goal of empowering women to succeed.
After acting for so long like she’s all kissy-kissy huggy-huggy with her hunbots, one can’t blame those sellers for thinking that Stidham cares at all about their problems with LuLaRoe. With great hope, they reached out to her on social media, especially Instagram. Mainly, their messages look deferential and downright generous to me.
One hunbot wrote:
I love this company and love all of the changes taking place but this launch and the last month has been so disorganized and just a disaster.
Stidham (or whoever’s handling her account) deleted the post without answering it.
Another hun wrote:
As a small business owner I feel like our voices are not being heard and we are being ignored.
Stidham’s account deleted that one too.
A third comment came in from a hun who says she has breast cancer:
It has been quite the roller coaster with your company. I’ve endured so many failed launches, crappy prints, poor quality clothing, and broken promises. Here I am trying with all my might to continue to provide for my family, relying on my supplier to come through. …Now, I have nothing.
Stidham’s account deleted the comment, then banned the person who wrote it.
But that reaction sure beats Stidham’s nastiness toward a former seller. The ex-hun commented that Stidham was “ruining families” with her “lies.” Stidham deleted the comment, of course. But then she sent a vicious private message to that ex-hun, who manages a chiropractor’s office:
Wow should I post about chiropractic quacks too! Is this nice and what’s your motive? Try KINDNESS it’s always better!
DeAnne’s Very Jesus-Flavored Response.
Now, DeAnne Stidham herself could see that these comments weren’t stopping no matter how snide and nasty she got or how much venom she spat. So she swung into action.
Yes, indeed. She picked up her mighty LuLa-phone and she made a big ole Instagram LuLa-video aiming to quiet the riot.
In it, she further insulted the huns who criticized her, deleted all negative comments, and demanded that nay-sayers quit her company.
New Haven Register quotes her as saying in a video dated December 9th,
If you’re negative, you guys get to leave. I don’t care about you.
A few days later, she instructed her audience to delete any negative comments they themselves receive. To the “trolls” issuing these negative comments, she said,
We don’t care, sorry. Go be snarky with someone else. . . Ain’t nobody gonna take your crap. Sorry! Don’t want ya! … Ain’t nobody like you, nobody wants to be your friends. . . If you see anybody that’s a troll, you guys: delete ’em, delete ’em, delete ‘em!
Wow, Jesus would be so proud of her–if Christianity’s claims about him were true, of course. (Of course, if they were, I doubt we’d have a tenth the problems with Christians that we do.)
Release the Hounds!
In these and other videos, Stidham admonished her huns not to follow news stories about the company’s lawsuits. Instead, they should totally buy more LuLaRoe stuff to stock up! (I’ve seen numerous agents saying for the last year or so that “there’s no better time” to sign up–even as LuLaRoe collapses.)
It’s a totally “ridiculous” and “stupid” and “silly” situation anyway, Stidham declared. She’s already on record as telling her huns to ignore anything they hear about LuLaRoe that’s damaging to the company’s reputation.
Oh, and she also asked her followers to “protect” her from damaging comments on social media:
Protect me. If there’s any negativity here I need you to protect me and you guys, pull them off and report them, OK? You guys I don’t need negativity and I’m not going to stand for it.
I’ve always gotten this vibe off hardcore MLM huns that they’re a bunch of overgrown high-school Mean Girls. Stidham ain’t helping there.
Stidham’s husband Mark already metaphorically beat his chest at Providence’s agents. He told them that LuLaRoe wouldn’t pay “a f***ing dime” of their bills unless a court ordered them to do so. For good measure, he threatened to “take our two to three hundred million dollars to the Bahamas, and f*** everything.”
Greed is Good. Again.
I’m bringing all this up because we’re entering a new year–and it is more buyer beware than we’ve seen in a very long time.
MLMs enjoy some very highly-placed friends, protectors, and benefactors. They have the clout to rewrite laws to benefit themselves. Somehow, apparently, they can even escape the scrutiny and restraining hand of federal agencies.
Individual consumers have largely been left to it in the marketplace. This lack of governmental oversight comes at a purely disastrous time, too, when the middle class continues to get decimated and people are scrambling harder than ever just to pay their bills.
MLMs ride into the picture promising riches, financial freedom, and security for way less effort than most jobs demand and way fewer qualifications than high-end jobs usually require. Those promises sound like victims’ tickets out of looming economic disaster and dwindling resources. Only too late, these victims discover how many lies their uplines told them.
Worst of all, these victims might not ever find out that those super-successful hunbots didn’t get there by cold-messaging their one-time, long-ago acquaintances on Facebook or doing tons of Insta videos shrieking about how much they love their MLM’s snake oil. Of the fraction-of-a-percent who strike it rich in MLMs, Lazy Man tells us:
They were people who started at the top or brought their pyramid scheme from another MLM with them.
Gang, that blew my mind–but it also explained a lot.
Don’t support MLMs or get involved in them. Even small pity purchases only delay the inevitable for MLMs’ victims and draw out their financial agonies. No matter how appealing the hype might be around this or that MLM, never forget the truth about them:
If something sounds too good to be true, it almost certainly is.
Today, Lord Snow Presides over a new year of increased consumer risks. Be careful out there. We’re on our own when it comes to these sorts of companies.
NEXT UP: Speaking of Christians getting fooled by hype, another Endtimes Rapture scare has stopped our presses! We’ve also got NDEs on the dance card, along with evangelical leaders’ reactions to the new #Exvangelical movement taking shape on social media. It’s going to be busy this week! See you soon.
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Lord Snow Presides is our off-topic weekly chat series. I’ve started us off on a topic, but feel free to chime in with anything on your mind. Pet pictures especially welcome! The series was named for Lord Snow, my recently departed white cat. He knew a lot more than he ever let on.
MLM Lingo: A “hunbot” or “hun” is an MLM salesperson. They act robotically and rely upon forced endearments like “hun,” their misspelled shortening of “honey.” A hunbot’s “upline” are the people above the hunbot in the scheme, including the person who signed them up (and the people who signed the signer-upper up, and so on). And the hunbot’s “downline” is anybody the hunbot manages to sign up. The upline takes a cut of the downline’s sales activity, which is why MLMs overprice their products so much.