That unlikely phrase, which brings to mind women waddling around on two sticks of Land O’Lakes, is behind one of the biggest multi-level-marketing disasters of recent years. Beginning in 2013, the apparel company called LuLaRoe discovered women’s unmet longing for super-soft pants and rode a cash rocket to the moon, only to self-destruct just as quickly amid scandals, lawsuits, and bankruptcies. The whole sordid story can be found in LuLaRich, a new documentary streaming on Amazon Prime.
LuLaRich’s filmmakers have a lot to say about the mystery of why millions of distributors, most of them women, get sucked into tempting MLM schemes like LuLaRoe in the first place. Simultaneously wacky, entertaining, and heartbreaking, the documentary doesn’t quite satisfy, because it ignores the real forces that drove women into LuLaRoe’s tacky clutches. But, whoa! What a ride it is to get there.
Down the rabbit hole
First, let’s define some terms. Multi-level-marketing companies, or MLMs, begin when founders hire an independent representative to sell products. Although a small part of the rep’s compensation comes from profits on the merchandise, the real money begins flowing when she recruits a loyal customer to start selling, too. The first representative gets paid a commission on all the newbie’s sales, and when she, in turn, begins making her own converts, part of their earnings will flow upward to the original mentor, too.
The name of the game is “team building,” with huge trees of “uplines” and “downlines” that are broad at the bottom levels and narrow at the peak, creating a suspiciously pyramidal structure. These companies are often lucrative for that small circle of early adopters at the top, and financially catastrophic for everyone else who gets involved. As the Federal Trade Commission warns, “You might think that, with your willingness to work hard, you can earn substantial income through the MLM. In fact, most people who join MLMs and work hard make little or no money, and some of them lose money.”
These days, there are MLM opportunities for every category imaginable, from motor oil to feminine hygiene products—the latter promoted almost exclusively by men, via videos that are just as painful to watch as you’d expect. Mark Stidham and DeAnne Brady Stidham (no relation to yours truly) founded LulaRoe with a popular maxi skirt. But it was the leggings, loudly patterned and universally described as smooth as butter, that really caught on.
“If you want to create incredible wealth, identify an under-utilized resource. And you know what? There is an under-utilized resource of stay-at-home moms,” Mark Stidham says in LuLaRich. (Inexplicably, the couple agreed to appear on camera for this trip to the whipping post.) “They have chosen to be a mother and if you make that choice, you pay a price, career-wise, in our country right now. We have a lot of people of faith that have been attracted to this business. Here, we’ve got this army of women who are smart, passionate, beautiful, funny, educated, and want to do things.”
The lavish compliments don’t quite cover up the underlying meaning of Stidham’s message: America’s sexism was his family’s opportunity. The first step in wealth creation (or is it extraction?) involves convincing LuLaRoe’s would-be “Independent Fashion Retailers” to purchase a startup package. Currently available for $499, at one time, new representatives were expected to invest a minimum of $5,000, and as much as $10,000, before selling so much as a single pair of those legendary leggings. “Some of these women were told they should sell breast milk just so they could afford the initial start up costs,” says Derryl Trujillo, a disgruntled former home office employee whom the documentary uses to great, campy effect.
Courtney Harwood, a former retailer and member of the Stidhams’ inner circle, describes in the film how she took out a credit union loan to buy into the business on the ground level. Her husband was surprised and skeptical, but Harwood believed in herself. “I was working in corporate America, rising up the ranks. . . . I felt like I was missing out on [my kids] growing up,” she says. “Part of what attracted me to joining LuLa was the hope that I could make what I was making, if not more, [while] working less and being able to spend more time with them.”
The business exploded, and in just a year Harwood leveled up to the highest status in the company. Soon, she was cashing massive bonus checks that were calculated based on the wholesale ordering of her down line. “They very much encouraged [us to] spend, spend, spend that bonus check. They wanted you to look good to recruit people to live this fabulous lifestyle,” she told the documentarians. ‘I remember one dinner, I spent almost $10,000 and I acted like it was nothing. . . . I would start to max out the credit cards, living paycheck to paycheck. But my empire was growing.” Eventually, she had thousands of representatives on her team. As long as recruitment continued at a frenzied pace, money kept pouring in.
Equating money with meaning
Harwood’s journey from the corporate world to LuLaRue is atypical; far more common are the stories of women in Stidham’s “army” of stay-at-home moms. The company worked hard to lure them in with marketing that emphasized empowerment and community. As LuLaRoe’s website proclaims: ‘We believe every individual is beautiful, unique, and most of all—powerful.” Becca Peter, who has made a hobby out of researching and exposing LuLaRoe, blurts out what she thinks is the motive behind multi-level-marketing’s enduring appeal to such women. “You want to be home with your kids, but you want something more,” she says. “You want to be an adult human who’s contributing to your household and to society.”
The filmmakers let this statement pass without commenting on it, as though its truth was self-evident. This is where LuLaRich’s analysis breaks down. Although the documentary rightly flogs MLMs for exploiting shallow pop feminism, it fails to ask why the phony trappings of business ownership would be so seductive in the first place.
Here’s why: The women of LuLaRoe are swimming in a cultural sea that insists compensation is the best way to measure the value of any activity—and ultimately, any person. As Peter’s comment implies, making money to help fuel consumption is sometimes treated like the key to adulthood, and even humanness. Not bringing in cash puts you on the level of a child or a pet, who eats food and sleeps under a roof provided by someone else. Childcare, household management, and administrative work are all recognized careers, but it’s the exchange of money that somehow makes them legitimate in the warped view of our late-stage capitalism. Someone who does these tasks without getting paid might easily fear she is not really “contributing” to her family or her community. It doesn’t help that mainstream feminism has focused more on equality in the workplace than at home.
Needless to say, the tens of thousands of women who became Independent Fashion Retailers did not need LuLaRoe or any other side hustle to become fully adult humans. Most were already contributing more to their households, and to society, than they could add much to by trying to turn a profit on cheap clothes. But in our culture, it’s no wonder thousands of women couldn’t see that fact clearly. When the scale the world uses to weigh what matters is broken, the measurements get distorted. We start thinking buttery leggings mean more than they really do.
“I wanted to give women an opportunity to ease the stress, to be able to give something to their families, to give back to their husband,” DeAnne Stidham says. But her targets were already giving plenty, and the opportunity she offered was anything but stress-free.
Circling the drain
LuLaRoe peaked in 2016 with some 80,000 independent retailers. In only a few years, they’d collectively made the company billions of dollars. But just as quickly as the dream came together, it all fell apart.
Leggings began to be delivered soaking wet, moldy, and smelling like a “dead fart,” as one top consultant declares. The pants suddenly ripped like toilet paper, and pattern placement became grossly inappropriate. The most fascinating interview in LuLaRich is with Iliana Estarellas, a designer who describes her high-volume work as “making art with a gun to my head,” ripping off patterns found on Google and changing them by 20 percent to avoid intellectual property claims (still, LuLaRoe got sued). The system of turning customers into sales competitors proved unsustainable as markets got saturated.
In 2017, the company implemented a 100 percent refund policy for any returned merchandise, only to abruptly cancel the program after retailers reportedly took them up on the offer to the tune of more than $100 million. Other reps who were slower to submit their claims were stuck with thousands of dollars in unwanted merchandise they were forced to get rid of any way they could. Finally, in 2019, the State of Washington sued, alleging Mark and DeAnne Stidham were operating a lucrative pyramid scheme.
Their moment in the sun seemed to be over. But earlier this year, the state’s case was settled for a fine of less than $5 million, with no admission of wrong-doing required—that’s a slap on the wrist to a billion dollar company. LuLaRoe’s salesforce shrank considerably, yet it’s still a big business with almost 250,000 followers on Instagram alone. The Stidhams are still “LuLaRich,” but some of their most successful retailers lost everything, with divorces and bankruptcies piling up along with the worthless leggings.
Of all the former consultants interviewed in LuLaRich, though, Courtney Harwood’s journey has the saddest ending. After she resigned from the MLM, she was forced to sell her house and cars. “At that point it was a lost cause between me and my husband. On the weeks that I don’t have my children . . . I eat cheese and crackers for dinner to save money,” she admits, bursting into tears. “I’m trying to be non-judgmental. I was judgmental for the years I was in LuLaRoe because I thought I was better than everyone else. Now I realize that everyone has a story.”
At one point, the documentary highlights a quote from LuLaRoe’s marketing material: “There is no amount of success that will ever be able to compensate for failure in the home.” It’s a statement that has roots in the teaching of Mormon leader David O. McKay, and it’s supposed to be a gotcha moment, exposing just how backward and patriarchal LuLaRoe really is. But it’s actually one of the few moments of truth to emerge amid all the greed and back-stabbing.
For anyone, man or woman, there truly is no level of power or wealth that can make up for the destruction of a household. The tragedy at the heart of LuLaRich is that numerous women who were trying to balance the financial achievement they thought would validate them, and the family life they loved, wound up in a business model that cost them both.