Revolve, a popular Gen Z retailer, is currently embroiled in a $50-million lawsuit that alleges the brand engaged in deceptive social media marketing practices. The lawsuit, filed in California Central District Court, claims that Revolve utilized influencers to promote its products without adequately disclosing the paid nature of these brand partnerships. These influencers allegedly presented their endorsements as genuine recommendations, leading to at least a million consumers being misled.
Ligia Negreanu, the lead plaintiff in the class-action lawsuit, stated that had she been aware of the sponsored nature of these influencer posts, she would not have purchased Revolve’s products at the prices she paid. The lawsuit seeks $50 million in damages and names Revolve’s affiliate companies, as well as three influencers, as co-defendants. The Federal Trade Commission (FTC) guidelines require influencers to clearly disclose any material connections with brands when endorsing products on social media—a requirement that Revolve is accused of disregarding.
According to Bogdan Enica, one of Negreanu’s attorneys, the issue arises when these paid partnerships are not disclosed as mandated by the FTC. The lawsuit also highlights the importance of clear and conspicuous disclosures, such as the “paid partnership” label recommended by Meta or the #ad hashtag, to ensure transparency in influencer marketing practices. Negreanu’s legal team emphasizes that these guidelines are crucial for protecting consumers from misleading advertising.
In its 2023 annual report, Revolve acknowledged the legal risks associated with non-compliance with FTC guidelines by its social media influencer-partners. The National Advertising Division of the Better Business Bureau previously advised Revolve to enhance the disclosure of material connections between the brand and influencers in its product gifting program. Despite these recommendations, the lawsuit alleges that Revolve violated various consumer protection laws in more than 20 states, including the Florida Deceptive Trade Practices Act and the Unlawful Business Practices Act.
Revolve Group’s financial performance has shown growth, with net sales reaching $1.1 billion in 2024—a 6% increase from the previous year. Profits also saw a significant rise of 73% to $48.8 million during the same period. However, the company’s shares have experienced a decline, dropping by 38% over the course of the year. On Monday, shares in the online fashion retailer climbed nearly 4% to close at $20.71, reflecting investor sentiment amidst the ongoing legal challenges.
As the lawsuit against Revolve unfolds, it sheds light on the complexities of influencer marketing and the importance of transparent disclosure in advertising practices. The case serves as a reminder of the regulatory standards that govern social media endorsements and the potential consequences for brands that fail to adhere to these guidelines. Consumers are increasingly demanding authenticity and transparency from influencers and brands, signaling a broader shift towards ethical advertising practices in the digital age.
