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Cami Téllez never liked buying underwear, but maybe that’s why the 24-year-old is suited to take on Victoria’s Secret.

As a teen in Princeton, New Jersey, her visits to the Quaker Bridge Mall and the biggest retailer in women’s undergarments left her feeling inadequate, or worse. There were the images of supermodels in that faux boudoir setting cribbed from some male fantasy (not surprising since the idea behind Victoria’s Secret was a place for men to lingerie shop). And then came the products, like a push-up bra called the Bombshell that promised to add two cup sizes.

Victoria’s Secret “made me feel like I wasn’t enough,” said Téllez, a first-generation American whose family is from Colombia. “It wasn’t a brand for me or for people who looked like me.”

By the time Téllez entered her senior year at Columbia University in 2018 as a double major in art history and English, she’d had enough. In her eyes, Victoria’s Secret was still helping maintain a “cultural hegemony” over what’s supposed to be pretty, and that was hurting women. #MeToo was in full swing. Others had to be sick of this, too, she thought. She aimed to find out by posting online polls in Facebook groups. Téllez got 10,000 respondents in two days and a definitive answer. No matter which part of America she asked, attitudes were the same: Lots of women disliked buying underwear, too.

From there, Téllez moved quickly. She created a 40-page plan — including a logo — in two days. The brand was called Parade because the word “feels celebratory, but also it’s about collective action,” she said. In early 2019, she dropped out of college to pursue her idea. About six months later, she secured her first investors.

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Despite being in her 20s, Téllez had been around the startup world for some time. Her father, Omar Téllez, has worked as an executive at young tech companies. (He doesn’t have a formal role at Parade.) She also had a job at an online mortgage startup and interned at a venture capital firm.

Anchored by colourful basics starting at $US8 and marketing filled with diverse faces and bodies, Parade won over teens and younger 20-somethings — the oldest members of the Generation Z cohort that established brands are desperately trying to lure. A little more than two years after its debut, Parade is valued at $US140 million ($193 million). The company declined to share revenue numbers. However, according to Bloomberg Second Measure, which analyses anonymous credit card transactions, sales have more than tripled this year.

“We want to become the next big underwear brand for everyone,” said Téllez, who serves as Parade’s chief executive officer and creative director.

Taking more than $US40 million from investors so far has no doubt raised the stakes. Nowadays, the cost barriers to starting a consumer brand have been drastically reduced by e-commerce and sophisticated digital advertising. Just in women’s underwear and basics, there are a slew of brands, including ThirdLove and SKIMS, selling similar, simple designs, with marketing also aimed at various body types.

Amid the boom in digital brands, or what are often called direct-to-consumer firms, lots of companies have found a slice of customers for an initial pop, but then most plateau. Téllez and Parade, which has 50 employees, are now at that step, essentially having to prove themselves again. And to get there, the company is leaning on a well-worn expansion playbook for brands founded online.

Parade, based in New York, is opening its first store next month in Manhattan’s SoHo neighbourhood. It turns out that a store is still a good way to acquire customers, and with digital ad rates continuing to rise, it’s now often less expensive.

The 2,000-square-foot location on Broadway screams Colour Field movement and abstract expressionism — two cultural influences that Téllez, who helped design the space, ticked off as inspiration. Bright, geometric totems dot the store’s interior, and a lush, red carpet blankets the space. Shoppers will be greeted by a rainbow archway. It looks like a candy store for 20-somethings.

The store “aims to rewrite the way that people interact with their underwear,” Téllez said during a tour of the unfinished store. She offered little on how exactly that will be accomplished, but more locations are being considered. “We’re going to be aggressive and opportunistic in our approach to expanding.”

In the underwear category, about 80 per cent of sales still happen in a store, according to Téllez. That’s why the brand is also working on wholesale deals to sell its goods through established retailers across the US as soon as next year, she said, while declining to discuss potential retail partners. The company has also expanded into adjacent categories — another hallmark of digital brands — with bralettes, tank-tops and loungewear.

Parade’s ambition comes as Victoria’s Secret tries to mend itself. The brand had been sputtering for a few years, and then in 2019, long-time CEO Les Wexner’s close ties to Jeffrey Epstein surfaced. Wexner’s connection to Epstein, who was charged with sex-trafficking minors before dying in prison, renewed scrutiny of the company and dovetailed with allegations of sexual harassment in its ranks.

All the bad publicity didn’t help matters. Parent company L Brands spun off Victoria’s Secret earlier this year into its own public company. Its executives now talk in terms of transforming a brand that still generated $US4.6 billion in sales in the first three quarters of this fiscal year. Marketing has been overhauled to include plus-sized and transgender models. The angels, that group of scantily-clad supermodels that tormented Téllez, have been retired. It has also brought on prominent female celebrities, including tennis star Naomi Osaka and actress Priyanka Chopra Jonas, to craft its revitalisation.

Victoria’s secret is focused on “creating an inclusive environment for our associates, customers and partners to celebrate, uplift and champion all women,” the company said in a statement in response to being asked about Téllez’s criticisms.

Téllez is convinced she is tapping into an open space with a brand that’s designed for Gen Z by Gen Z (at 24, she’s the beginning of the budding generation). Parade aims to make customers feel good about their bodies, avoiding oversexed looks, she said. The brand’s models have everyday aesthetics, with tattoos and stretch marks. And the products don’t make people look like they are trying to seduce someone, with their vibrant colours and lack of lace and push-ups.

Targeting teenagers and twenty-somethings is a smart move because many brands are focused on courting millennials because they have more money right now, according to Janine Stichter, an analyst at Jefferies.

“Parade’s really different than what’s out there,” she said.

Another big differentiator is Téllez, according to Jason Stoffer, a partner at venture capital firm Maveron, which has a stake in Parade and a history of investing in digital-first brands that includes Allbirds and Everlane. When it comes to startups, founders are often what attracts investment, even more than the actual business. Stoffer, who is also on Parade’s board, said Téllez possesses a “special” mix of business savvy and creativity.

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Stoffer points to how the brand has quickly connected with customers as not only a sign of Téllez’s “incredible creative talent,” but also how the company will keep growing and defending its business.

“We see thousands of women posting selfies of themselves in their underwear on social media,” Stoffer said. “Whenever you’re taking a selfie in a way that’s vulnerable in that regard, what you’re really saying is this is a brand I trust.”

Téllez landed on a similar theme after asking women what they want.

“They were sold something based on their insecurities by people who didn’t look like them,” Téllez said of the women who responded to her poll questions three years ago. The world was changing, and underwear wasn’t keeping up.”

Bloomberg

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