LuLaRoe
LuLaRoe generated $1.8 billion in sales in the last 12 months.

Instagram/@lularoe

LuLaRoe is launching a massive refund program in response to customer complaints that the company’s leggings “rip like wet toilet paper” and develop holes after as little as a few hours of wear.

The four-year-old company, which sold $1.8 billion in clothing in the last 12 months, is announcing Tuesday that it will issue full refunds for any defective merchandise purchased between January 1, 2016 and April 24, 2017.

Customers can get the refunds through the 80,000 people who sell LuLaRoe clothing — whom the company calls “independent retailers” — or directly from the company online.

LuLaRoe is also implementing a new policy, called the “Happiness Policy,” that’s intended to make it easier for customers to get refunds, credits, or exchanges for purchases going forward.

“We listened and we heard the feedback from social media and our consumers and even from our retailers,” LuLaRoe CEO Mark Stidham told Business Insider. “If someone has spent money on one of our products, we want them to feel that they got value for that money they spent.”

LuLaRoe leggings
Customers have shared hundreds of photos online of ripped LuLaRoe leggings.

Laura McIntyre

Business Insider reported in February that hundreds of customers were complaining about rampant problems with holes developing in the leggings, which are LuLaRoe’s most popular product.

Customers also claimed that many retailers — who buy clothing at wholesale prices from LuLaRoe and then sell it at a markup to friends and family on Facebook and at parties in their homes — wouldn’t allow them to return defective merchandise.

At the time, a Facebook group devoted to sharing stories about damaged leggings had more than 1,400 members. Now, the group has more than 26,000 members.

One month after Business Insider’s story, two LuLaRoe customers filed a class-action lawsuit accusing the clothing brand of ignoring customer complaints and knowingly selling defective clothes that “rip like wet toilet paper” to enrich the company’s top executives.

Stidham says LuLaRoe’s unhappy customers represent a tiny fraction of its total customer base.

“It’s statistically insignificant — it doesn’t exist,” he said, comparing the several hundred complaints lodged against LuLaRoe on the Better Business Bureau’s website to the 17.5 million garments that the company sold in March alone. “At the same time I don’t want to be flippant about that.”

‘I don’t feel we have much to apologize for’

Stidham said the new policies do not represent an apology or a change of course for the company, but rather reinforce the fact that LuLaRoe stands behind the quality of its products.

“I don’t feel we have much to apologize for,” he said. “I’m empathetic and I’m sorry that [some customers] had a bad experience. But I don’t feel that the company is in a place where a blanket apology is necessary.”

LuLaRoe
LuLaRoe CEO Mark Stidham (right) and his wife, who founded the company.

Facebook/LuLaRoe

According to LuLaRoe’s internal audits, LuLaRoe’s damage rates are “very, very small,” he said. “But no matter how small it is, if it’s your piece of clothing and the bottom rips out of it, you are not going to be happy.”

He said LuLaRoe “will always look for ways to improve quality and style,” but the company is not changing…