Clothing Company Hit With $1 Billion LawsuitBy Jon Delano

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PITTSBURGH (KDKA) — Ellen Eckert, of Oakland, sold LuLaRoe clothing out of her home for months before coming to a stark conclusion.

“LuLaRoe feels like a cult based on the five hours of ‘training’ that I just sat through,” Eckert told KDKA money editor Jon Delano on Monday.

A cult, she says, that encourages its consultants or independent fashion retailers to buy products even when they have no customers to sell them to.

“We were just told, buy, buy, buy,” she says. “You have to place a minimum $5,000 order to be a consultant.”

Now a class action lawsuit filed against LuLaRoe alleges that women like Eckert were “unknowingly recruited into LuLaRoe’s pyramid scheme through manipulation and misinformation.”

That brought a sharp rebuttal from LuLaRoe, saying, “Our success has made us the target of orchestrated competitive attacks and predatory litigation … We have not been served with the recent complaints, but from what we have seen in media reports, the allegations are baseless, factually inaccurate, and misinformed.”

But the Ph.D. candidate at Pitt reached a very different conclusion, especially about the owners and top executives.

Eckert: “They’re not making tens of thousands of dollars off the selling of clothes. They are making tens of thousands, if not hundreds of thousands of dollars, off of the thousands of women who signed up below them.”
Delano: “And that’s the pyramid?”
Eckert: “That’s the pyramid scheme in a nutshell. They’re making huge bonus checks off women below them.”

Ashley Sharek of Wexford, who also sells LuLaRoe women’s wear, disagrees.

“This will blow over just like everything else has,” says Sharek.

That’s because of LuLaRoe’s customers.

“They love me, and they love my business, and they love the clothes,” Sharek said. “So they’re going to keep coming back, and I’m going to continue to serve them.”

Still, Eckert feels cheated.

“I was told I was getting into something which was nothing like I experienced,” says Eckert.