Two new class-action lawsuits against leggings retailer Lularoe say the company is running a pyramid scheme, convincing women to buy tens of thousands of dollars of merchandise the company knows they will never be able to sell.
The lawsuit filed Monday (10/ 23) claims Lularoe's main source of income is not sales to customers but the thousands of purchases by their sellers to build their "inventory."
"Consultants are instructed to keep around $20,000 worth of inventory on hand, and are inundated with the phrase 'buy more, sell more,'" the lawsuit said. "These incentives mean new consultants are aggressively pressured to continue purchasing wholesale inventory even when the inventory they have is not selling, is unlikely to sell, or is piling up in their garage."
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Source: BuzzFeed; photo: Lularoe