Lia Sophia Jewelry|Faces Class Action

CHICAGO (CN) - Lia Sophia jewelry shut out 30,000 "sales advisers" by going online and refuses to honor its lifetime guarantee, a class action claims in Federal Court.

Cynthia West and Kristine Hollander sued ACT II Jewelry LLC dba Lia Sophia and its sole member, Kiam Equities Corp.; CEO Victor Kiam III; and creative director Elena Kiam, on June 23.

Lia Sophia, based in Roselle, Ill., is "one of the country's largest fashion jewelry sellers," according to the complaint.

Lia Sophia used "sales advisers" who held "jewelry parties" in customers' homes. "At its peak, Lia Sophia had over 30,000 sales advisors who sold more than $300 million of costume jewelry a year," according to the complaint.

"An essential part of that direct-sales model was Lia Sophia's 'unrivaled lifetime replacement guarantee,'" say the plaintiffs: a former saleswoman and a customer.

Lia Sophia guaranteed it would replace any jewelry it sold, "for as long as the customer owned the jewelry," the complaint states. "The lifetime guarantee enabled Lia Sophia to charge more for its jewelry than the prices typically commanded in the market for fashion or costume jewelry."

But after 40 years of business, Lia Sophia announced on Dec. 1, 2014 that it would wind down its U.S. and Canadian operations by Dec. 31, and would shut up shop completely by the end of February 2015, the plaintiffs say.

It did not, according to the lawsuit. It simply became an online business, bypassing all of its "sales advisers."

"Lia Sophia continues to sell off its old inventory directly to customers," the plaintiffs say. "However, as plaintiffs and numerous other customers will attest, Lia Sophia refuses to honor its lifetime guarantee on prior purchases, and ignores customer requests for replacements or repairs. Indeed, Lia Sophia posted the following statement on its own Facebook page in response to the scores of complaints: 'Unfortunately, the lifetime replacement guarantee that was offered on purchases prior to 12/28/2014 is no longer valid.'"

They claim that Lia Sophia knew "for much of 2014" that it was going to go all-online, "eliminate its sales advisors, and repudiate the lifetime guarantees on all the jewelry previously sold."

"Yet, Lia Sophia induced its sales advisors to continue to sell and recruit, and to purchase additional products and supplies from Lia Sophia, despite knowing that Lia Sophia would not be around for its sales advisors to ever recover on those purchases and recruitments. Similarly, Lia Sophia continued to sell jewelry to customers with its lifetime guarantee, all the while knowing it was going to close its business and attempt to extinguish the guarantee," the complaint states.

West was a sales adviser for three years. She says she created "a network of customers" for Lia Sophia, which the company has "usurped" by selling to them directly.

She and Hollander seek class certification and damages for two classes: sales advisers and customers.

They also seek an injunction, restitution, disgorgement of unjust profits, and damages for breach of contract, consumer fraud and common law fraud, under state and federal laws.

They are represented by Joseph Siprut.

Kiam Equities and Lia Sophia did not respond to a request for comment.

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