KUSA - A popular clothing company is facing a $1 billion lawsuit from the people who sell its products.
LuLaRoe recruits people to pay several thousand dollars up front to buy clothing in bulk, then sell it out of their homes.
Some of those sellers are now accusing the company of deceiving them.
“You feel kind of at first like, 'what could I have done to make this successful,'" said Cheryl Hayton to KING5 News in Seattle. "You know we did everything we could. I mean, we worked our butts off.”
Hayton is one of three Sacramento plaintiffs who feel deceived by Lularoe.
Their class action lawsuit claims the company is a pyramid scheme that pressures retailers into buying more product than they can afford. The suit says because the retailers are given patterns without choosing them, they aren’t able to sell the pieces they want.
But Andrea Ryall, a Denver seller, says her experience doesn’t match theirs.
“Like any business, you have a chance of it working or a chance of it not working, but it’s a legitimate small business,” Ryall told 9NEWS.
Ryall's been a retailer for a year, and has about 1,000 dresses, tops, leggings and skirts in her basement.
She says the model of receiving random patterns on the clothing actually helped her form a community with other local consultants because they aren’t always in direct competition.
“I think it’s a genius design and why LuLaRoe has been successful, and why it will continue to be,” Ryall said.
The mom of two says she has made a profit, and also enough to contribute to local charities and have fundraisers of her own.
In a statement from LuLaRoe, the company said it has grown exponentially over the last several years.
"Our success has made us the target of orchestrated competitive attacks and predatory litigation. We take all litigation – regardless of its lack of merit – seriously," a statement read. "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. We will vigorously defend against them and are confident we will prevail.”
LuLaRoe was founded in 2012 by DeAnne Stidham. Prior to launching the clothing line, Stidham was a single mother, struggling to balance life with seven children and a job, according to the LuLaRoe website.
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