Meet LuLaRoe, the clothing company planning to bring 1,000 jobs to Blythewood

Before forming her company LuLaRoe, DeAnne Stidham was a single mom who needed a way to earn a living while taking care of her seven children.

In the early 1990s, she met a pair of dress wholesalers and started selling end-of-season dresses to friends and family. By 2012, Stidham was designing her own maxi skirts. The designs took off, with sales fueled through her use of social media and parties at friends’ houses.

The business grew quickly, and she and her new husband, Mark Stidham, formed a company later that year that they named LuLaRoe after their three oldest grandchildren – Lucy, Lola and Monroe. The concept was not to sell directly to the public, but to “consultants” or “independent fashion retailers” who would use DeAnne’s social media and party techniques to sell the clothes themselves.

“It was Mark that said, ‘Why don’t we put our heads together and come up with a business plan to help other women make money,’ ” she said in a promotional video on the company’s website. “We knew the consultants coming on would be in that range of raising their children. We needed to make it very easy and very simple and not too confusing and not too detailed so they wouldn’t get frustrated and say ‘I can’t do this. I’m too overwhelmed. I’ve got diapers and sickness and …’ ”

Last month, the company announced plans to open an East Coast distribution center in the former Bose plant in Blythewood. The company says it hopes to employ 1,000 people by the end of the summer.

LuLaRoe today sells its “buttery” soft leggings, maxi skirts and other clothing through about 80,000 independent retailers.

The retailers also form their own teams of other sales reps, reportedly keeping 5 percent of their profits. Those consultants can also recruit their own sales reps. That is how the multilevel marketing structure builds for those who have been selling the longest or work the hardest.

“Our company’s mission is to bless lives and strengthen families,” Mark Stidham, now the company’s chief executive, said in an exclusive email interview with The State newspaper. “We support the independent fashion retailers with the opportunity to serve others. It is extremely satisfying for us to support these dedicated, creative business owners with their LuLaRoe commitments and their own unique circumstances, goals and objectives.”

Rolling boutique

One of those consultants is Ashley Barber, of Lexington.

Barber, a mother of four, was introduced to LuLaRoe by her sister, Paige Boykin, who had been to a LuLaRoe pop-up party. Barber attended a party at her sister’s urging, liked it and decided to give the business a try.

“The clothes make me feel good,” she said. “They’re comfortable, cute and stylish.”

While the styles stay the same, only 5,000 of any print are produced before it changes. And the consultants never know what print they are going to get.

“I loved the product and wanted to make money,” said Barber, 42, who at the time was working two jobs to help support her elderly father.

She purchased the minimum amount of merchandise from the company for $5,000 last July. Today, not only is her “basement boutique” full of the clothes, but she purchased a custom-made $14,000 enclosed trailer, complete with heat, air conditioning and two changing rooms, to take her business on the road.

The rolling boutique is stocked with 1,800 articles of clothing and can be pulled up to a hostess’ house for a 1.5-hour pop-up party with no setup and no tear down.

“It’s stress-free for the hostess,” she said

Barber can roll the trailer up to offices or other workplaces on a lunch break, much like a food truck. It can also be driven to a school or other location for a fundraising event for teachers, sports teams, mission trips or other causes. Barber donates 20 percent of an event’s sales to the cause, and any donation over $100 is matched by the company.

Barber wouldn’t disclose how much money she makes selling the clothes or through percentages from her three team members. “You get out of it what you put into it,” she said.

Barber was on a motivational Caribbean cruise early this month with about 2,000 other reps, hosted by the Stidhams.

“We didn’t just meet them; they spent time with us,” she said. “They care about us and want the best for us. They feel like we’re their children and they want us to succeed.”

Columbia checked all the boxes

The multilevel marketing model works.

The Corona, Calif.-based company has had staggering growth since its founding in 2012, raking in $1.8 billion in sales during the past 12 months, according to Mark Stidham. So much growth, in fact, that LuLaRoe last month invested $35 million to purchase and renovate the 104-acre, 470,000-square-foot former Bose plant on I-77 north of Columbia.

“As we conducted a search for our first East Coast distribution hub, the Columbia area checked all the important boxes,” Stidham said. “We conducted a study that found that shipping from the Columbia area provided the shortest shipping time to the majority of independent fashion retailers, which was our top priority. We also found a fantastic existing building located in Blythewood in the Columbia area that we felt could be easily equipped to meet our needs.”

The deal was made in just six weeks. The company asked for no state or local incentives.

“We are moving quickly to set up our Columbia facility because our fast-growing business and independent fashion retailers demand it,” Stidham said. “As a privately held business, we are able to make quick decisions. We had also earmarked funding for the facility prior to the search, which helped reduce the time necessary to close on the facility.”

LuLaRoe has some thorns

Despite the success, the company is not without detractors.

The company is facing two federal lawsuits centered on charging sales tax on items sold in states without a sales tax.

“We are fully aware of this issue and have invested significant resources to address it,” Stidham said. “A former technology vendor had a software failure that misidentified the accurate location of certain consumers. We have contracted a new point-of-sale vendor to accurately identify sales tax moving forward.

“In addition, we have already issued refunds for incorrect sales tax collection to customers who contacted us directly to identify their proper location, and we are in the process of proactively refunding all affected customers.”

Also, some customers have complained about the quality of the clothes, particularly the leggings, which some have charged tear like “wet toilet paper.”

“We’ve listened carefully to questions that consumers have shared about the quality of our leggings,” Stidham said. “On Tuesday, April 25, 2017, we launched the Happiness Policy, Make Good Program and Limited Warranty to reinforce and clarify our commitment to providing value and enjoyment from our products.

“We continuously seek to improve and update our operating procedures – and recently again updated our operating procedures as a part of our ongoing efforts – which we believe continue to enhance quality controls and quality assurance for our clothing. We believe these continually updated processes will assist in detecting defective products for removal from distribution.”

Despite the complaints, the company’s consultants are mostly passionate about the clothes and their home-based businesses, he said.

“Every independent fashion retail has a passion,” Stidham said. “And that passion is personal to each of them. For some, it may be the financial opportunity that drives them. For others, it is the opportunity and flexibility that being your own boss provides. Some are driven by the confidence and self-discovery that selling and wearing LuLaRoe offers them. And of course, there are others for whom the fashion is their passion.”

For Barber, the Lexington retailer, selling LulaRoe is more than a passion for her and her husband, John; it allowed her to quit working two jobs, still support her father and help send her children to college.

“You’re your own boss,” she said. “I love it.”

This story was originally published May 14, 2017 at 1:01 PM with the headline "Meet LuLaRoe, the clothing company planning to bring 1,000 jobs to Blythewood."