Providence Industries Llc vs. LuLaRoe Llc

Case Background

On November 29, 2018, Plaintiff Providence Industries LLC and others filed a Fashion Industry lawsuit in the California State, Superior Court of Riverside County (Case number: RIC1825263). This case was assigned to District Judge Anne M. Nardacci

Cause

Providence Industries (MyDyer) entered into a critical Sourcing Agreement with LuLaRoe in April 2016, establishing what initially appeared to be a promising partnership in the fashion retail industry. The agreement required LuLaRoe, a prominent MLM company in the women’s clothing sector, to purchase products with payment due within seven days. However, the relationship deteriorated when LuLaRoe’s financial stability began to falter in mid-2017. LuLaRoe implemented significant policy changes that triggered a devastating chain of events in their MLM business operations. In April 2017, the company altered its retailer bonus structure, causing monthly revenues to plummet from $200 million to $100 million. The situation worsened when LuLaRoe initiated a 100% refund buyback policy, resulting in $120 million in returns from their fashion retail consultants. Despite these clear signs of financial distress, LuLaRoe continued placing substantial orders with MyDyer. The supplier payment defaults began mounting as LuLaRoe ordered tens of millions of dollars in products through April 2018 while concealing their deteriorating financial condition. The MLM company’s litigation reached a critical point when Mark Stidham, LuLaRoe’s owner,