LuLaRoe will permanently lay off 167 workers at its Corona distribution center five days before Christmas.
The layoffs were listed as a permanent closure of the facility in a notification received Wednesday, Oct. 23, by the state’s Employment Development Department. The state requires employers to report pending layoffs at least 60 days in advance or else they must pay the workers for that period.
All the positions described in the notification were warehouse jobs. LuLaRoe’s distribution center is at 1375 Sampson Ave.; its corporate headquarters is on Temescal Canyon Road.
The multi-level marketing company was started by husband and wife Mark and DeAnne Stidham in 2013. Women, many of them moms looking to make money working from home, buy the colorfully patterned dresses, tops and leggings from LuLaRoe, then sell the items through social media or at home parties, similar to Tupperware and Rodan & Fields.
New LuLaRoe consultants “onboard” for an estimated $5,000 to $9,000 for inventory and entry to the company’s sales system. Bonuses are rewarded based on total retail sales that they, and members of their team, make to consumers, according to the company.
Lularoe reported $2.3 billion in sales in 2017. Since then, it’s been fighting numerous lawsuits, including a $48.7 million suit filed in late 2018 by a major supplier that claimed it was not paid for the goods it delivered.
The lawsuit, filed by Long Beach-based Providence Industries on Nov. 28, 2018, sought payment for clothes it had manufactured and delivered. It also accused the Stidhams of creating shell companies to hide their money from creditors.
One of those alleged shell companies is Carolina Pines, owner and operator of a warehouse in Columbia, S.C., and listed as a registered company there. In a court filing, Providence said the South Carolina property could be a tactic to move assets out of California and delay payments to creditors. Carolina Pines was listed as a co-defendant in Providence’s lawsuit.
LuLaRoe also was sued by more than a dozen consultants who bought wholesale products from the company and claimed they were not paid back when they attempted to return unsold or damaged inventory. The company said in 2017 the lawsuits were “baseless…We will vigorously defend against them and are confident we will prevail.” The court actions had sought class-action status.