In early 2016, Amy Jo Reece became a retailer for clothing company LuLaRoe, paying $6,900 for apparel to sell from her home in Culpeper, Va. Two years later, Ms. Reece says she is stuck with $14,000 worth of LuLaRoe inventory sitting in boxes in her basement.

Ms. Reece was among the tens of thousands of women drawn to LuLaRoe’s message of financial empowerment and community, and loved the brand’s brightly patterned, buttery-soft leggings.

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