'LuLaRich' Reveals a Hole in the American Economy – The Atlantic

The controversial cult brand LuLaRoe sold a powerful idea: that mothers could succeed as entrepreneurs while spending meaningful time with their kids.
People who have heard of LuLaRoe have usually come across it for one of two reasons. Either someone they know has tried to sell them the company’s stretchy leggings and fit-and-flare dresses over Facebook, or they’ve seen some of the gleeful coverage of LuLaRoe’s very public disintegration as a brand: the lawsuits, the bankruptcies filed by its sellers, the boxes of apparently moldy clothing shipped to vendors that smelled, in one woman’s description, like a “dead fart.” (Leggings! Never not controversial!) Much of LuLaRich, a new four-part Amazon series exploring the company’s rise and fall, focuses on its alleged mismanagement and manipulative aspects, grouping it with some of the splashier docuseries of years past. No one at LuLaRoe seems to have found themselves getting the area above their groin branded, or poisoning an Oregon salad bar with salmonella. But in one scene, a former LuLaRoe vendor recalls a company meetup where everyone assembled was, like her, wearing brightly patterned leggings and a broad, be-lipsticked smile. “I remember looking around and being like, We all look the same,” she tells the camera. “I was like, Oh my God, I’m in a cult.
As I watched LuLaRich, though, I found it less interesting as a voyeuristic peek at the workings of a controversial company, and more enticing as an indictment of structural societal failure. LuLaRoe was a multilevel-marketing company that promised people—largely women—that they could make money from their own homes simply by selling clothes. Like most MLMs, it relied on two things. The first was an aura of relentless positivity—as Amanda Montell detailed in her book Cultish earlier this year, MLMs deploy language in many of the same ways that nefarious faith groups and cultlike brands do, love-bombing new recruits, suppressing negative thoughts or statements, and organizing group events designed to keep participants in a state of high arousal so that they’re more susceptible to suggestion.
Read: We choose our cults every day
The second was something LuLaRoe’s founders—a married couple named Mark and DeAnne Stidham—saw (and exploited) even as it’s mostly ignored in discussions about the American labor market. For all of LuLaRoe’s manifold flaws and dubious practices, it was able to see what its followers wanted. MLMs, in part, capitalize on the near-universal desire of working parents to truly manage a work-life balance: to participate in the economy and realize achievements for themselves while also spending meaningful time with their children. “I was just told that I could be home with my kids, and I could make money, and I love clothes,” one LuLaRoe vendor tells the directors. “This [was] a dream come true.” Mark Stidham, a bearded character who radiates smug paternalism, says something in the series that I’ve hardly stopped thinking about since. “If you want to create incredible wealth, identify an underutilized resource,” he explains. “And you know what? There is an underutilized resource of stay-at-home moms.” As galling as it is to admit it, given what happened next, he’s not wrong.
LuLaRich, directed by Fyre Fraud’s Jenner Furst and Julia Willoughby Nason, is narrowly focused and chronological, to the point of obscuring some significant, broader aspects of the story. DeAnne, a vision of coiffed blond hair and statement jewelry, explains how she came up with the idea for the business in 2012 after selling maxi skirts to her friends. “I’m not a numbers person,” she says unconvincingly, “but by darn I know what’s in that bank account.” The company, named for three of her grandchildren (Lucy, Lola, and Monroe) was able to capitalize on a streak of factors it could never have predicted: social media, the launch of Facebook Live (which became a valuable sales tool for LuLaRoe vendors), and the rise of athleisure. DeAnne promoted the company as an empowerment tool for women, particularly women with children. She channeled the language of #bossbabe feminism to sell the idea that mothers could succeed as entrepreneurs and breadwinners, while simultaneously asserting that their familial duties were paramount. At LuLaRoe’s website, the company still pitches itself as offering “the freedom and flexibility that comes from building your own business at your own pace. This creates the time to spend with your family, the very thing DeAnne had once desired for herself!”
The series uses handy triangular diagrams to explain the structure of MLMs, which differ from pyramid schemes only insofar as there’s a product being sold: Consultants said they purchased $5,000 or $10,000 starter packs of LuLaRoe clothing from the company at cost (the price has since been cut), and kept any profits they made when they sold items, typically to friends and family. But the real money came from recruiting other vendors, who in turn recruited their own teams beneath them, and so on. From 2014 to 2016, LuLaRoe went from having 500 individual “retail consultants” to having 60,000 across the United States. For each person a consultant recruited, they’d get a bonus and a cut of all their future sales. At the company’s peak, it had billions of dollars of retail orders a year. A very few women who’d managed to recruit substantial teams beneath them were reportedly making $50,000 a month just in bonuses. Ambitious consultants converted their children’s bedrooms into makeshift LuLaRoe boutiques and sold products to spiraling audiences on Facebook Live, in a scrappy approximation of QVC. All the while, the company reportedly encouraged consultants to flaunt their newfound wealth and success on social media—all the better to draw yet more women into this supposed community of surefire winners. (According to the series, the bottom 70 percent of LuLaRoe’s sales base made $0 in bonuses in 2016.)
Read: When the scam is the American dream
Inevitably, LuLaRoe’s explosive growth became a problem. The quality of the product sent to vendors began to suffer. Some designers, who were reportedly tasked with creating 100 original prints a day, were accused of copying art they found online; others didn’t think through how prints would translate when worn, leading to some viral fails. (See: Pisa penis leggings and hamburger crotch.) The company was shipping so much product that, as the series illustrates, its quality control failed, and boxes of leggings were left outside in the rain because there was simply nowhere else for them to go—hence the moldy smell. LuLaRich notes that the company also changed its bonus structure to lessen rewards for recruitment, which the series suggests was done to ward off investigations into its business practices (a speculation that the company has denied), and to dispel criticism that it was essentially a pyramid scheme. As LuLaRoe’s brand was mocked across the internet, people who’d paid thousands of dollars to buy into the company struggled to sell faulty, sometimes even toxic, products. As of 2019, more than 100 had filed for bankruptcy. (A disclaimer since posted on the company’s site emphasizes that no seller is guaranteed income, and that profits instead come from an individual’s hard work, as well as market conditions.)
LuLaRich offers up these details without pausing to consider how the promise of LuLaRoe was able to attract so many wannabe vendors, or even why the brand got so popular in the first place. The company did succeed in selling women clothes they could afford, that they wanted to wear, and that they felt good in. By contrast, Lululemon, another cult brand, has drawn headlines in the past for its $​​130 leggings and its murky sales practices. The series alleges that DeAnne became fixated on the weight of her most successful and visible consultants, even encouraging them to have gastric-bypass surgery. But it doesn’t note that, unlike most mainstream clothing brands, LuLaRoe caters to women of all shapes and sizes, or that its high-waisted, supportive leggings were once especially popular among people whose bodies had been changed by childbirth. Or that its colorful garments can be layered on top of one another by women whose faith requires their clothing to be modest.
Similarly, the series touches on the dearth of diversity within the company (as applies to direct sales more generally: 75 percent of Americans involved in 2020 were women, and 87 percent were white), but doesn’t dig any further into why. The directors also note that both Stidhams are members of the Church of Jesus Christ of Latter-day Saints, and that their religious beliefs and patriarchal values pervaded the company, but they don’t explain that LDS members are disproportionately involved in MLMs (more than 100 such companies were founded in Utah), or that multilevel marketing tends to target specific demographics colloquially known as “the three Ms”: moms, Mormons, and military wives. For LDS women, who are encouraged to stay at home and dedicate themselves to their families, MLMs can seem to offer the opportunity to contribute financially without sacrificing time with their children. (Mission work, in particular, can also prepare women for the marketing aspect of direct sales, and for the evangelism required to rise in the ranks.)
LuLaRoe filled a gap in the market, in more ways than one. That it did doesn’t excuse some of the allegations brought by the series: that the company advised people to sell breast milk to save for start-up costs, or that it hid billions of dollars of profits in shell companies. But it does suggest that the American economy fails on many fronts to provide parents with what they want and need. This fact goes far beyond the three Ms, and beyond the one in five American parents who takes care of kids full-time. But to focus narrowly on that demographic for now, what LuLaRich unintentionally makes clear is that there are hundreds of thousands of stay-at-home parents beyond the three Ms who want to work but need the flexibility and tools to frame how they do it.
Some countries give stipends to families; some offer exceptional state-funded child-care facilities so parents can work. The U.S. does neither, and the cost of child care has increased 2,000 percent over the past four decades, which is surely a factor in why so many organized, entrepreneurial, creative people end up hawking bogus weight-loss shakes and holiday-themed tunic tops to try to make ends meet. The pandemic has been an opportunity to reimagine the logistics of work: the hours, the locations, the framework, the expectations. But less discussed is the question of how legitimate companies might take advantage of a space that scammy MLMs have long dominated: the full economic potential of parents.

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