The Downfall of Gen Z Underwear Startup Parade: A Tale of Leadership and Firings

Introduction

Underwear brand Parade, once valued at $200 million, recently faced a significant decline and was sold to a lingerie manufacturer, Ariela & Associates International (AAI), for a considerably lower price. Former employees of Parade have attributed the downfall of the company to founder Cami Téllez's leadership style and certain questionable tactics employed by the management team, including the announcement of employee firings on the communication platform Slack.

The Sale and the Leadership Style

In August, Parade, a popular underwear startup among Gen Z, was sold to AAI for what one former employee described as a meager sum. Several ex-staffers have voiced their concerns about Cami Téllez's management style, stating that it played a significant role in the company's demise. They mentioned feeling overwhelmed and unable to keep up with Téllez's relentless pursuit of rapid growth.

Harsh Tactics and Firings on Slack

Former Parade employees revealed that the leadership team employed harsh tactics that affected the overall work environment. One particular issue raised was the practice of announcing employee terminations on the company's Slack channel, a communication platform widely used by the staff. On February 7, 2022, Parade executive Kerry Steib sent a message via Slack, notifying the entire staff about an employee's departure. The message stated that the employee was not able to meet Parade's pace and expectations, particularly in their role as a social leader.

Intention of Transparency

Cami Téllez responded to the criticism, explaining that employees had requested more insight into the reasons behind staff departures. In an attempt to address this request, the leadership team started proactively messaging about employee departures, expressing gratitude for their contributions to Parade. Téllez emphasized that these departures were not part of a larger layoff but rather individual cases. However, she expressed disappointment upon learning that this approach had an unintended negative impact.

The Rise and Fall of Parade

Parade launched in 2019 with a small collection of basic underwear styles in seven different colors. The company quickly gained traction and amassed nearly 100,000 customers within its first year, generating approximately $9 million in sales. One of the key strategies employed by Parade was offering free underwear to micro-influencers with a few thousand followers in exchange for social media posts. This approach helped Parade become one of the fastest-growing direct-to-consumer apparel brands in history and led to its valuation of $200 million in the previous year.

The Sale and the Reasons Behind It

On August 11, Cami Téllez informed 48 members of her team via Slack that Parade was on the verge of finalizing a deal with AAI. As part of this deal, Téllez would be required to step down from her position. In a subsequent email sent on August 25, Téllez explained that she sold the company due to a significant macro-economic shift that made it challenging for brands like Parade to secure funding. She also acknowledged that structuring the company to delay profitability until at least the fifth year was a mistake she would not repeat.

Conclusion

Parade, once a thriving Gen Z underwear startup, faced a decline that led to its sale to lingerie manufacturer AAI. Former employees have criticized the leadership style of founder Cami Téllez, highlighting the negative impact it had on the company. The practice of announcing employee terminations on Slack further added to the concerns raised by ex-staffers. Despite its initial success, Parade's downfall serves as a cautionary tale about the importance of effective leadership and management practices in sustaining and growing a business in today's competitive digital landscape.—————————————————————————————————————————————
By: mlicea@businessinsider.com (Melkorka Licea)
Title: The Downfall of Gen Z Underwear Startup Parade: A Tale of Leadership and Firings
Sourced From: www.businessinsider.com/parade-underwear-employees-founder-cami-tellez-collapse-2023-12
Published Date: Fri, 01 Dec 2023 21:42:42 +0000