Just five days before 1,500 of the highest-selling LuLaRoe contractors were to embark on a company-paid cruise, the CEO of the multi-level marketing company cancelled the trip, citing growing concerns over the coronavirus, according to two independent sellers who spoke on the condition of anonymity because they are contractually forbidden to speak to the media.
The visibly distraught Mark Stidham spoke live to an audience of over 13,700 independent sellers last week on a private Instagram account, an unusual occurrence because his wife and company founder, DeAnne, is typically the face of the multi-level marketing apparel company.
LuLaRoe’s sudden cancellation of its 2020 cruise joins a list of postponed and cancelled music festivals, tournaments, conferences, and any event or location that puts people in close quarters. A growing list of schools and colleges are implementing distance learning; airlines are canceling flights; and social distancing is touted as one way to slow down the spread of coronavirus.
It wasn’t until almost a full 24 hours after the announcement that a written statement came from the company to retailers. In an email obtained and reviewed by Cashay, a four paragraph-long memo cited recent travel advisories from the Centers for Disease Control and Prevention and U.S. Department of State as the primary reason for the cancellation.
The email echoed Mark’s sentiment from the previous evening: “...we are acting responsibly in protecting your lives, your families, and your communities,” it read.
LuLaRoe, known for its psychedelic stretchy apparel, is sold through a network of independent retailers who paid as much as $10,000 for the opportunity to sell the merchandise. Since the company’s launch in 2012, it has catapulted from relative obscurity to $2.3 billion in retail sales in 2017.
In recent years, the company has been plagued by reports of shoddy merchandise quality, former retailers who have filed for bankruptcy, layoffs, an unfair change to its refund policy, and lawsuits against the company.
A reward for top sellers
The eight-day, seven-night cruise with Holland America was scheduled to sail on March 15, 2020 and dock in Mexico, Grand Cayman, Jamaica, and the Bahamas before returning to Florida. The annual cruise is an opportunity for retailers to attend daily three-hour general assemblies, break out sessions and use their free time to network.
Those who had their plans upended also happened to be the company’s top-selling retailers.
As a reward for how much product they moved, the free cruise was only available to its top 5% and 10% of retailers, who were required to sell at least $12,000 per month for six of the 12 months during the year. A retailer would need to sell between 10 to 12 pieces a day for a single month in order to qualify, according to one of the sources.
Another retailer told Cashay that the company is refunding anything paid on additional funds for the cruise, such as optional excursions and beverage packages. No refund for the cruise will be issued since it was, and retailers are trying to recoup their flights from airlines.
The sources who spoke with Cashay are taking the news in stride and keeping it in perspective. Both were disappointed but understood that a canceled cruise might mean the difference between getting sick and spreading the virus or slowing it down.
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