LuLaRoe Founders Accused of Hiding Millions to Avoid Creditors
The leggings empire made Mark and DeAnne Stidham rich. So where’s the money?
Rack of unsold inventory in the basement of LuLaRoe fashion consultant Amy Jo Reece.
Photographer: Damon Casarez for Bloomberg BusinessweekIn 2017, LuLaRoe’s wildly colorful leggings and tops became so popular online that the four-year-old company earned about $2 billion in revenue—about as much as J. Crew. But unlike J. Crew, LuLaRoe didn’t sell its clothes to customers. It sold them wholesale to its tens of thousands of “independent fashion consultants,” who in turn sold them retail.
Many of those people have struggled to find success with LuLaRoe, and the company has been sued by former consultants and customers alleging a wide range of misconduct, from improper sales tax collection to running an illegal pyramid scheme, all of which the company has denied. Now, a new suit takes aim at company founders Mark and DeAnne Stidham, alleging that they’ve hidden tens of millions of dollars in shell companies to avoid paying their creditors.