LuLaRoe Founder DeAnne Stidham's Life As Head of a Controversial MLM ·

19 May 2024, 00:00

DeAnne Stidham is the face and founder of LuLaRoe.
While her husband, Mark, serves as the CEO, Stidham is by far the most recognizable figure associated with the controversial leggings multilevel marketing company, thanks to her frequent social-media output.
Business Insider scoured public records and social-media posts to get a better sense of the LuLaRoe founder and the company she launched.
Stidham and LuLaRoe did not respond to Business Insider's multiple requests for an interview.
We also spoke with a number of former employees and women who said they got to know Stidham when they became LuLaRoe consultants — independent retailers who purchase garments from LuLaRoe and sell the clothing to consumers.
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This article was first published October 3, 2019. Since that time, LuLaRoe settled its pyramid scheme lawsuit with the state of Washington for $4.75 million. Most of that money will go to Washingtonians harmed by their participation in LuLaRoe, although the multi-level marketing scheme did not admit to any wrongdoing.

DeAnne Stidham had a challenge to share with her followers: Get out of the house and talk to three new people.

"The sun should be shining," Stidham said during an April 22 live broadcast on Instagram. "If it's not, go to the mall, go to Target, go wherever you can where people gather. You go out there and you put a smile on your face."

Stidham wasn't just encouraging her 95,000 Instagram followers to take advantage of the springtime weather. The founder of LuLaRoe, an embattled multilevel marketing company, was outlining a sales pitch.

LuLaRoe does not sell its clothing directly to shoppers but instead to independent "consultants," who in turn hawk their wares at house parties and on social media.

"You brighten somebody else's day by giving them a compliment and letting them know that you have amazing clothing to share with them," Stidham said.

Perhaps dangle a free tank top or a Cassie pencil skirt before the prospective customer, she suggested, before quickly adding that LuLaRoe's army of independent consultants were under "no obligation whatsoever" to give out merchandise.

"It's always a good reason to make a connection with other people," Stidham went on. "So I want to — "

And with that the broadcast cut out, interrupted by a reposted image of one of Stidham's followers modeling a flowy purple skirt amid a sea of bluebonnets. But the message was clear: Get out and sell.

Stidham is the founder of LuLaRoe, a multilevel marketing company best known for its cheerily patterned "buttery soft" leggings. But now countless former consultants, not to mention the state of Washington, allege that LuLaRoe is an illegal pyramid scheme.

Who is DeAnne Stidham, the woman at the center of this controversy? Her husband, Mark, holds the title of CEO, but DeAnne has always been the face of the company.

Representatives for Stidham and LuLaRoe did not respond to Business Insider's multiple requests for an interview. Business Insider reviewed public records and social-media posts dating to 2012 and spoke with former consultants and employees who have interacted with Stidham over the years to get better insight into the founder of the company.

'She didn't want to sew anymore'

In many ways Stidham's path in life mirrors that of her parents, Elbert and Maurine Startup.

Active members of the Church of Jesus Christ of Latter-day Saints, in Pasadena, California, the Startups first met at Brigham Young University in 1935 and went on to have 11 children together, according to a 1972 New York Times review of their book, "The Secret Power of Femininity." DeAnne and her twin sister, Dianne, were the youngest.

The Startup family, including young DeAnne Stidham (third from right, bottom row). Courtesy of a former LuLaRoe consultant

According to a blog post from one of Stidham's older sisters, the Startup kids pitched in with the family's catering business. DeAnne and Dianne attended Chino High School, where they joined the cheerleading squad and made the honor roll. For senior year, they transferred to nearby Arcadia High School.

In an on-camera interview for LuLaRoe, Stidham said she drove her mother "crazy" as a young woman because of her blossoming interest in sewing dresses for school dances. "She didn't want to sew anymore because she'd already spent years and years — remember I was the 10th child of 11 children," Stidham said.

She recalled how her mother instilled in her an eye for details, a meticulous focus on a garment's pattern, neckline, buttons, trim, and zippers.

'I am just a helpless woman'

While juggling their big family, business ventures, and faith, Stidham's parents managed to maintain a hustle on the side: fighting the creep of feminist ideals into mainstream society. To that end, Maurine and Elbert Startup published a book in 1969, "The Secret Power of Femininity: The Art of Attracting, Winning, and Keeping the Right Man for You."

A 1972 New York Times review of the book reveals one of its recurring themes: discouraging women from coming across as being able to "kill your own snakes" or "take care of your own affairs." The Startups recommended that women practice pouting, stamping their feet, and saying in the mirror things like "I am just a helpless woman at the mercy of you big, strong men."

DeAnne Stidham's parents coauthored "The Secret Power of Femininity." Courtesy of a former LuLaRoe consultant

Stidham's parents supplemented their income and spread their beliefs by hosting "femininity forums" around Los Angeles.

In the years following the book's publication, Maurine Startup established herself as an activist in the fight against the ultimately stifled Equal Rights Amendment (ERA), a proposed constitutional amendment meant to end any legal distinctions between men and women.

She joined Phyllis Schlafly's Stop ERA organization and rose to the rank of chairwoman of the group's California branch, according to "All in the Family: The Realignment of American Democracy Since the 1960s."

Maurine Startup rose through the ranks of the Stop ERA movement, which was launched by activist Phyllis Schlafly (pictured). Underwood Archives / Contributor / Getty Images

The anti-feminist beliefs of the Startups could be discarded as irrelevant, if not for reports around Stidham's own behavior years later.

LuLaRoe has long touted its intent to help "empowered women" to "empower women." One former consultant who became close to Stidham told Business Insider that the founder often spoke of such goals early on. "She was constantly talking about how she wanted to empower other women, which is also my goal," the consultant said. "I still, to this day, want to believe that she really did care."

But the credibility around LuLaRoe's ethos of female empowerment has frayed after allegations of less-than-empowering behavior on the part of company leaders.

In 2018, Bloomberg reported that Stidham and her sister Lynnae Knapp encouraged LuLaRoe leaders to travel to Tijuana to get fitted with a gastric sleeve because, in the words of former LuLaRoe consultant Stacy Kristina, Stidham "likes her leaders to be a size small or medium."

'Love, love, love'

As a young woman, Stidham attended her parents' alma mater from May 1977 to April 1978, though school records show she never earned a degree from Brigham Young University.

A few months after they left school, the Startup twins married a pair of cousins in LA's towering LDS temple.

DeAnne Startup, then a fashion merchandising major at BYU working in her mother's bridal shop, wedded Kenneth Neff Brady, a stereo salesman. Dianne tied the knot with his cousin, Stanley George Stringfellow, on July 14. Afterward, the Startups celebrated with a garden reception.

She went on to have four children with her first husband, and she adopted at least three more from Romania starting in 1990. The future founder of LuLaRoe also divorced Brady at some point and wedded Mark Stidham.

Deanne Stidham has frequently posted about her second husband on Instagram, like this Father's Day post from 2013: "I love, love, love this handsome man in my life — thank you for being such a loving and patient father to our kids, especially while they were all home."

Before LuLaRoe

A LuLaRoe's peak, it was widely reported that the company was doing $2 billion in sales. But Stidham herself ran into debt a number of times in the year before her company launched.

Business Insider reviewed tax documents listing a number of liens filed against the company founder between 2001 and 2015, by creditors like the IRS, San Bernardino County, the state of California, Fia Card Services, and a woman named Jenny Brown. Stidham was released from all such liens, which together totaled $52,712 and sometimes also listed Mark as a debtor.

By far the most significant debt came on July 28, 2015, when the IRS filed a $102,277 federal tax lien against the Stidhams. The couple was released from that lien months later.

Public records aren't as clear about Stidham's source of income before LuLaRoe.

A 2010 state document indicates that she worked as a secretary for Mark's company, Advanced Concrete Structures. Looking back further, a 2006 California Uniform Commercial Code — or UCC — record lists Deanne S. Brady of Chino, California, as a debtor to Utah-based skincare multilevel marketer Nu Skin Enterprises.

Like LuLaRoe, Nu Skin Enterprises' business practices have frequently come under fire. The UCC record was terminated within about eight months, indicating that the loan was paid off. Nu Skin Enterprises did not respond to Business Insider's requests for comment.

Catching the dream

Most of Stidham's renditions of how LuLaRoe came to be leave out one important player: her twin sister, Dianne, now known as Dianne Ingram. She did not respond to multiple requests for comment.

Ingram and Stidham teamed up to open a short-lived nail-salon business in 1992, according to documents filed in Utah. The twins also seemingly sold clothing together well into 2012, according to Instagram posts documenting their tables at retail shows.

It's unclear when the twins stopped working together. Stidham posted a selfie of her and Ingram from a trip to snowy Duchesne, Utah, in November 2012, as they apparently embarked on a series of "maxi skirt & girls dress parties."

In a video posted to LuLaRoe's official Youtube on July 26, 2019, Stidham says she first began to sell clothing after a chance encounter with a man selling girls' dresses for $10 at a swap meet.

"I get home and my brain starts going over and over and over: what can I do, what can I do?" she said. She said she invited the dress seller to her home and hosted her first dress party. Stidham said the man wasn't interested in continuing to sell clothes through parties, but she ended up taking the idea and running with it.

In an interview for the video, early party host Sabrina Langford described how Stidham would roll up for parties with a car load of dresses: "She would always put on white gloves and a big smile on her face and had bright-pink lipstick."

Stidham said that, in total, she spent 27 years selling dresses through parties. She doesn't mention her sister in the video.

But on January 10, 2014, Stidham posted on a Facebook page called "The Dress Party," a business devoted to selling children's clothes through dress parties in Utah, Arizona, and Nevada. The page did not mention Stidham or Ingram by name but included a phone number connected to a blog matching Stidham's residence.

"Sorry to inform you all that I am no longer doing the dress party business," Stidham wrote in 2014, before plugging her new business, LuLaRoe.

"You will love love love everything you see on our new website!!!" she wrote.

Regardless of whether Ingram was ever officially a part of LuLaRoe or an early version of the company, Stidham has since omitted her sister from the story.

"I really caught the dream when I started having my own children," Stidham said in a video interview shot for LuLaRoe. "We didn't have the money. We didn't have the resources for me to just go buy things."

In this version of the story, Stidham's daughter Nicole sparked the idea for the business that would become LuLaRoe by requesting that her mother fix her up a maxi skirt.

"She posted it on Instagram," Stidham said in a video posted on LuLaRoe's official YouTube channel. "I'm thinking, 'What is Instagram?' I never even knew what it was. And oh my goodness, she got a flood of text messages. Do you think your mom would make me a skirt? So I thought, 'OK, why not? I'll make maxi skirts. I have the time and the resources.'"

Stidham went on to say that she reached out to her niece, "Yo Gabba Gabba" costume designer Julia Knapp, who connected her with Jose Serabia, an apparel producer. In the July 26 video, the first official LuLaRoe event is said to have taken place at a Henderson, Nevada, Hampton Inn in 2013. LuLaRoe was born.

'Um, that's not LuLaRoe'

Documents filed with the state of California show that LuLaRoe LLC — with Mark Stidham as its registered agent — was incorporated January 25, 2013.

Consultants say that Stidham was the picture of an engaged entrepreneur, and social media backs it up. In early posts, Stidham didn't hesitate to give out her cellphone number to commenters expressing interest in hosting a dress party.

"I was like, 'This is crazy. This lady who owns this business is taking the time out of her day to text me. Wow, this is great,'" one former consultant who joined LuLaRoe in the early days told Business Insider.

By June 14 of the same year, Stidham indicated on Instagram that she was running out of space in her home, which had "turned into a warehouse." Her hands-on approach to the business struck a few early employees as well.

"When I first met her in the beginning, she was awesome," former consultant-support representative Phil Navarro, who worked at LuLaRoe from March 2016 to October 2017, told Business Insider. "Like a mom almost. DeAnne would come in and sit next to you and talk to you."

But that wasn't everyone's experience. Former LuLaRoe onboard specialist LaShae Kimbrough, who later became a consultant after August 2015, told Business Insider about meeting Stidham about two weeks into the job in February 2014.

"I'm in Chanel head to toe," she said. "I'm walking in the hallway, and she literally turns around and says, 'Um, that's not LuLaRoe.' I said, 'Of course not — it's Chanel.' And she immediately walked me to the warehouse and pulled some items for me and I put them on that day."

A former LuLaRoe consultant-support representative said that word of an incoming visit from Stidham could spark "a cleaning frenzy," as managers made it clear that the founder didn't like to encounter messy desks, snacks, or any expressions of "negative emotions."

"Anytime the message came across Slack that they were coming, I was on look-out duty," the former employee said.

The former employee said they would keep an eye on the window, waiting for Stidham's black Mercedes, with its distinctive LuLaRoe-themed vanity plate, to pull up.

As the months went on, Navarro also said he saw less and less of Stidham. That's not entirely unexpected considering the company's rapid growth. More ominous were the whispers from the managers, who would tell employees, "Don't go over to DeAnne's area. She doesn't want you guys around there.'"

'I felt like I lost a mother'

Today, Stidham is known for calling on her followers to block "trolls," her term for anyone who posts critical comments on her Instagram broadcasts.

One former consultant said that DeAnne's inability to separate herself from the business has led to a culture that stamps out any flicker of dissent. "If you were mad at the company, then you were mad at DeAnne," the consultant said.

The consultant added that Stidham would make out any critical remark about LuLaRoe's practices to be a "personal attack," making dissent nearly impossible.

Stidham has also consistently documented aspirational experiences on social media, like a tropical twilight spent on Oahu's Sunset Beach or a viewing of "Le Rêve – The Dream" at Wynn Las Vegas.

"She knew that you felt like you were part of the family," the consultant said. "And you didn't want to miss out on all those FOMO-y things."

The former consultant told Business Insider about getting invited to the Stidhams' multimillion-dollar ranch in Thayne, Wyoming.

"We didn't do anything there except eat lunch in the backyard," the consultant said.

But Stidham didn't just focus on showcasing her own success. One ex-consultant described how Stidham pushed them to post a photo of their luxury purse, which they'd acquired before joining LuLaRoe.

"Deanne's like, 'Tell everyone how much it was and why you were proud to buy this purse and how it makes you feel,'" the former consultant said.

The consultant added that when she first met and befriended the company founder, Stidham carried a $20 purse.

"And then all of a sudden it was like, 'What kind of Louis do you think I should get?'" the consultant said.

Stidham also brought consultants on shopping sprees at high-end stores like Saint Laurent and Gucci, chronicling their trips live on Instagram. In an Instagram livestream from January 23 of this year, she told her audience, "I have three rooms full of stuff that I have worn one time — one time."

But over the past few years, this cheery, FOMO-inducing narrative has begun to unravel.

Currently, LuLaRoe's chief supplier, Providence Industries, is suing the company for $63 million, citing unpaid bills. The state of Washington alleges that the multilevel marketer is an illegal pyramid scheme.

Stidham and her husband, Mark, have been tied to dozens of LLCs as well as two Koenigsegg cars worth $700,000 and $2 million, a Gulfstream jet that likely costs between $20 million and $22 million, and a $7 million ranch in Wyoming, even as former consultants waited on months-late refunds.

But one ex-consultant, who said that they were once close to Stidham, said that they still have sympathy for their former friend as controversy around LuLaRoe continues to swirl.

"It was hard when I quit because I not only quit my business but I felt like I lost a mother," the consultant told Business Insider. "It was like a death."

Do you have a story about LuLaRoe that you'd like to share? Email retail@businessinsider.com.

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LuLaRoe Founder DeAnne Stidham's Life As Head of a Controversial MLM