Cindy West did so well as a Lia Sophia jewelry sales representative that she became a leader in the direct-sales business, mentoring several sales representatives and pocketing a portion of their commissions.
Then, in December 2014, the company dropped a bombshell: It planned to shut down by February 2015, leaving West and her colleagues out of jobs and their customers without the company’s popular lifetime replacement guarantee, which promised the company would replace any jewelry it sold or provide a certificate redeemable for jewelry of comparable value.
Now, nearly three years after the direct-sales jewelry company shut down, former Lia Sophia sales representatives like West and millions of customers are going to get their due.
Or at least some of it.
A class-action suit West filed in June 2015 was settled this week, creating a $6.7 million cash fund that will be used to settle with qualified customers and sales representatives and will pay administrative expenses and attorney’s and incentive fees to the initial members of the class-action suit.
Customers who purchased jewelry between June 23, 2011, and Dec. 1, 2014, are eligible for settlements, as are sales associates who sold merchandise between Jan. 1 and Aug. 17, 2014. New sales associates who bought starter kits — which ranged from $99 to $149 — between Aug. 1 and Dec. 1, 2014, are also eligible for cash.
The suit alleged that Lia Sophia refused to honor its lifetime guarantee on purchases, even though it continued to sell its merchandise through an online outlet and no longer used its sales representatives. The suit also alleged that the company bypassed its sales representatives by selling via its online outlet, thereby cutting the sales representatives out of transactions.
The suit also said that Lia Sophia’s owners – Tory Kiam and his wife, Elena Kiam – knew months in advance that they would shut down the business but continued to recruit new sales representatives and allowed established sales representatives to continue selling jewelry.
Tory Kiam is the son of Victor Kiam, the onetime owner of the New England Patriots and president of Remington Products, who bought the business in 1986 and named it Lady Remington. The younger Kiam renamed it Lia Sophia after the names of his two daughters in 2004.
Approximately 4 million customers, more than 19,000 sales representatives and more than 2,700 new sales associates are eligible for settlements. Roughly $2 million will be distributed to Lia Sophia customers who purchased jewelry between 2011 and 2014. Customers will be put into categories based on how much they spent, and those in higher-spending categories will receive larger payouts. The total amount each individual receives will be determined based on the number of people who file claims, according to settlement documents.
For example, if 5 percent of customers who spent less than $100 file a claim, each of them will receive $8.01. If only 1 percent of customers who spent less than $100 file a claim, each will receive $40.09.
The settlement fund also sets aside $1.4 million for former sales advisers. Those who submit claims will receive a reward based on their sales. The amount they receive will also be based on the number of sales advisers who submit claims.
New sales advisers, who bought starter kits to begin selling Lia Sophia jewelry, have been allotted roughly $178,750 to reimburse them for the cost of their starter kits.
Plaintiff Cindy West sold roughly $20,000 in jewelry between January and August 2014, earning roughly 20 to 30 percent commission on those sales. Lia Sophia’s shutdown forced the Fairfax, Iowa, resident to push back her retirement more than two years. Now she’s happy to put the experience behind her, she said.
“I can hold my head up and face my customers and my teammates and say, ‘I did the best for you.’ ”