Revolve faces $50-million lawsuit alleging influencers hid paid brand partnerships
Popular Gen Z retailer Revolve is facing a $50-million lawsuit alleging that the brand's social media marketing tactics deceived at least a million consumers.
A class-action lawsuit, filed Friday in California Central District Court, accuses the Cerritos-based online retailer of violating federal trade law by operating an advertising 'scheme' in which influencers disguised paid product endorsements as genuine recommendations in order to boost Revolve's sales.
'For many years, Revolve used its position, payments and free merchandise to entice influencers to endorse and promote its products while failing to disclose any material relationship with the brand,' the lawsuit said.
Representatives for Revolve did not immediately respond to a request for comment.
Lead plaintiff Ligia Negreanu said in the lawsuit that had she known the influencers' posts were sponsored, she would not have purchased Revolve's products at the prices she paid, which at times were 10% to 40% higher than those of other retailers selling the same items.
The lawsuit is seeking $50 million in damages. Revolve's affiliate companies, as well as three influencers, were listed as co-defendants.
FTC-mandated disclosures should be 'difficult to miss,' like the 'paid partnership' label advised by Meta or the #ad hashtag, the lawsuit states. Instead, Revolve's paid influencers often merely tagged the fashion brand's Instagram account in their posts, according to the complaint.
'The problem comes when you don't disclose,' said Bogdan Enica, one of Negreanu's attorneys. He added that guidelines established by the Federal Trade Commission require influencers endorsing a product on social media to disclose any 'material connection' with the brand.
In its 2023 annual report, Revolve warned about the risk of litigation should its thousands of social media influencer-partners fail to follow FTC guidelines.
The National Advertising Division of the Better Business Bureau recommended earlier this year that Revolve 'modify influencer posts to clearly and conspicuously disclose the material connections between Revolve and influencers in its product gifting program.'
The lawsuit alleges that Revolve violated the Florida Deceptive Trade Practices Act, the Consumers Legal Remedy Act and the Unlawful Business Practices Act as well as consumer protection laws in more than 20 states.
Revolve Group's business has been growing. The company reported net sales of $1.1 billion in 2024, up 6% from a year earlier. Profits rose 73% to $48.8 million during the same period.
Shares in the online fashion retailer on Monday rose nearly 4% to close at $20.71, but have plummeted 38% this year.
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