In early April 2017, LuLaRoe (a women's leisurewear brand popular on social media) made headlines for a growing number of consumer complaints, including a lawsuit brought by disgruntled customers of the brand.
Good Housekeeping reported that complaints about LuLaRoe appeared to reach a tipping point in March 2017. That month, two LulaRoe customers initiated a class action lawsuit against the brand:
After news surfaced last month of the leggings' tendency to rip just hours into a single wear — and the fact that the company reportedly wasn't refunding unsatisfied customers, earning them a resounding "F" with the BBB — LuLaRoe will have to answer these claims in court ... Plaintiffs Suzanne Jones, of California, and Julie Dean, of Massachusetts, two of many unhappy LuLaRoe customers, filed a suit against the company on March 23 — both bought LuLaRoe leggings, expecting that soft, Netflix-binge-ready fabric, but, instead, after receiving their leggings, alleged significant defects. Of the three pairs Jones purchased, she claims one was so small, it was "as if they were manufactured for a child," the lawsuit draft reads. The other two, she said, developed holes "when she pulled on the leggings with her fingers."
LulaRoe's distribution structure (described as "pyramid selling" by the plaintiffs) apparently exacerbated the consumer friction. The filing alleged that people unsatisfied with torn leggings had little to no recourse in obtaining refunds from a network of independent sellers:
Thousands of customers across the United States are now stuck with defective products because defendants will neither issue refunds or make exchanges for customers and instead steer customers to the fashion consultants to deal with defective or damaged products ... defendants will not make refunds to fashion consultants for defective products and impose various barriers for exchanges. As a result, most fashion consultants will not take back defective products from customers.
On 9 March 2017, CBS reported increasing social media complaints about the company, as well as complications caused by the lack of a brick-and-mortar store to which defective merchandise might be returned:
The company's Facebook page and Twitter account have also been inundated with complaints about the quality of the leggings. The company is encouraging customers to send them direct messages so they can address individual complaints but does acknowledge a higher than usual amount of emails and messages at this time.
LuLaRoe is a direct sales, multi-level marketing company that employees consultants to sell their leggings, dresses, skirts and shirts. The independent retailers are a big part of the company's recent rise in sales with nearly 72,000 employed nationwide. Now it's these individuals who are reportedly on the hook for the defective merchandise.
Customers also say that they were were improperly charged sales tax in some states. On 1 March 2017, Business Insider reported that an internal LuLaRoe e-mail acknowledged customer complaints about excessive tearing were known to the company:
But it turns out that LuLaRoe is well aware of the problem and why it happens, according to a company email obtained by Business Insider.
"The leggings may get holes, because we weaken the fibers to make them buttery soft," Patrick Winget, the head of production for LuLaRoe, is quoted as saying in the January 17 email. "We have done all we can to fix them."
The email was sent by LuLaRoe's corporate office to its salespeople, who sell the multilevel marketer's brightly colored clothing to their friends online and at parties in their homes.
The outlet reported that a day prior to the article's publication, LuLaRoe disseminated "helpful talking points for your customers" to its network of sales representatives:
99.9% of our handmade products that are shipped stay out in the market with owners who absolutely love them! The industry standard for defective or returned apparel products is about 2.5%; our return rate is at less than half a percent (0.051%). This number is proof of our commitment to quality assurance – especially when you consider the millions of items that we produce and ship.
In a 28 March 2017 CBS MoneyWatch report, LuLaRoe maintained that it "categorically rejects the fabricated and exaggerated claims" in the suit.
Nearly all articles about the myriad challenges faced by LuLaRoe mentioned a Facebook group called "LuLaRoe Defective/Ripped /Torn Leggings And Clothes" with more than 23,000 members, as well as an "F" rating with the Better Business Bureau.