Source: https://fortune.com/2022/10/07/the-rise-and-fall-of-the-wing/
Archive: https://web.archive.org/web/2022101...com/2022/10/07/the-rise-and-fall-of-the-wing/
October 7, 2022 at 10:09 AM PDT
When female-focused co-working space the Wing laid off employees and closed 11 locations in spring 2020, it made a promise: “We’ll be back. And we’ll be better,” the startup said in a blog post.
In the end, neither statement was fully realized.
More than two years later, in August 2022, the Wing announced it was shutting down for good. It had reopened six locations after COVID, but the “operating environment” had proved “extremely challenging,” the company said in an email to members.
The email represented the culmination of the epic rise and tumultuous fall of a business built around what its founders once billed as a “women’s utopia.” Founded by Audrey Gelman and Lauren Kassan in 2016, the Wing saw its valuation peak at $365 million as investors like WeWork’s Adam Neumann, Sequoia Capital’s Jess Lee, and even soccer player Alex Morgan flocked to the mission of empowering women through community.
The space drew visits from the likes of Hillary Clinton, Alexandria Ocasio-Cortez, and Jennifer Lopez, and had a wait list tens of thousands of people long. Members were sold on the sisterhood of professionals, freelancers, and creative types the Wing had cultivated, its plush amenities, and its Instagrammable, millennial-pink interior that visitors likened to a womb.
But scandal chipped away at the Wing’s polished veneer. A 2019 lawsuit forced the Wing to drop its ban on membership by men, who were previously only allowed to visit as guests. Members and staff criticized management for mishandling an allegedly racist incident. Hourly employees, most of whom were Black or Brown women, went public with reports of mistreatment that contradicted the Wing’s uplifting, empowering brand. Gelman’s exit in June 2020 kicked off a round of CEO musical chairs. COVID forced the Wing to shut its locations and shed staff. A larger co-working company eventually bought a majority stake in the startup; under new ownership, the Wing staged an ambitious reopening of six locations in 2021 that lasted just months.
Gelman declined to comment for this story; Kassan did not respond to requests for comment.
Despite attempts to make up for past missteps, the Wing’s comeback collided with the tough economics of a shared office space market remade by the pandemic’s remote work revolution. But it also failed because the Wing seemed more devoted to expansion and its picture-perfect public image than building a workspace—and workplace—that lived up to its original mission. This account builds on past reporting by Fortune and others; for this account, Fortune contacted the founders, investors, and former executives and spoke with six former employees of the Wing and three former members of the co-working space.
The Wing’s origin story
The idea for the Wing dawned on Audrey Gelman, then senior vice president of public relations at public affairs and political consulting firm SKDK, in 2015 as she changed clothes in a Starbucks bathroom. Gelman dreamed up a business that offered on-the-go women a place to freshen up between appointments.
“They’re making self-driving cars. Why can’t we come up with a solution to this?” Gelman told Forbes in November 2016.
By the end of 2015, Gelman had raised over $2.5 million in seed funding supported by seven investors, including Serena Williams’s Serena Ventures. Investors were drawn to Gelman’s woman-focused concept—and to Gelman herself.
“Everyone’s like, ‘Oh, if you have the opportunity to back her, you should. She’s amazing. She’s a force,’” says Charlie O’Donnell, founder and general partner of Brooklyn Bridge Ventures and a seed investor in the Wing. “I got serious thumbs up all the way around. So I made a bet on her.” (Aside from O’Donnell, investors in the Wing declined or did not respond to Fortune’s request for comment.)
In 2015, Gelman connected with angel investor Alex Kassan, who declined to back the Wing but introduced Gelman to his wife Lauren, then-director of business development for ClassPass. Gelman and Lauren Kassan hit it off. Kassan joined Gelman as a founder and suggested expanding the Wing into a co-working space. The two divided business responsibilities—Kassan became chief operating officer, running the company day-to-day, and Gelman assumed the role of CEO, handling brand and creative.
The Wing’s first location opened in Manhattan’s Flatiron District in October 2016. Its second location, in SoHo, opened a year later. Inside, the spaces looked like a young feminist’s dream come true. They featured workspaces, showers, full restaurants, even a daycare—all of it luxurious and ultracomfortable, all of it in hues of pink. Members paid as much as $2,700 annually to access the co-working space and join the Wing’s exclusive club. Lines to get into the Wing’s spaces stretched around the block. Events boasting household names like Hillary Clinton and Meryl Streep as speakers drew hundreds of women.
The Wing fundraised at a breakneck pace. By the end of 2018 it had raised over $117 million from the likes of NEA, Kleiner Perkins, SoulCycle cofounders Julie Rice and Elizabeth Cutler, and WeWork.
Gelman’s profile grew too. She appeared on the cover of Inc. magazine while visibly pregnant, appeared in Chanel ads, and was featured in Fortune’s 2019 40 Under 40 list alongside Kassan and chief financial officer Diedra Nelson.
At its peak in early 2020, the company had 11 spaces in the U.S. and the U.K.—with plans for 20 by the end of that year—along with 500 employees, over 12,000 members, and a waitlist 35,000 long.
But as the business grew, expansion seemed to become the point, rather than a means to an end.
“There wasn’t a lot of transparency around what the strategy was at all,” said a former executive who asked to remain anonymous to speak openly about her previous employer. “Just having a cool place to work and free lattes wasn’t enough for us. That’s when it got frustrating. We were like, ‘Wait a second, what’s behind the curtain here? What are we doing?’” The Wing did not respond to multiple requests for comment.
O’Donnell says Gelman seemed reluctant to ask for help. “I don’t think [Gelman] leveraged her cap table of investors well. Once she started getting the big money from bigger investors, she just didn’t really make as much time for investor relations,” says O’Donnell. “Some of the small investors felt like they wanted to be helpful. She wasn’t really interacting with them. She said to me one time, ‘I’m busy running this company, and I’m going to make these folks a bunch of money.’”
O’Donnell partly blames the VC ecosystem that holds women to higher standards than men. “Being a female founder, you have to exude confidence,” he says. “And you have to make people feel like you’ve got this.”
Co-working controversies
The Wing had tapped into the post-2016 outrage among many American women who were fed up with systems of power built and controlled by the patriarchy. The Wing promised a safe space designed by women, for women. Its libraries were lined with books by only female authors. It offered lactation rooms and daycare services. Its thermostat was always set at a comfortable 72 degrees. It encouraged women to let down the guard that the world forced them to put up. So when the real-world experiences of members and employees didn’t meet the expectations the Wing set out, it wasn’t just a matter of bad service or poor employee relations. It felt like a violation of trust.
At the Wing’s West Hollywood location in May 2019, a white guest allegedly harassed member Asha Grant and her guest, both Black, over a parking dispute. Instead of removing the white woman from the premises, staffers told Grant they did not feel “empowered” to confront the woman. They offered Grant a free meal instead. The Wing confirmed the incident to Zora, a Medium publication for Black women, after it happened, and said the white woman originally accused Grant of using a homophobic slur against her, which Grant, a queer woman, “vehemently” denied. “In this specific incident, we struggled to get it right and we are deeply sorry,” the Wing said in a statement.
“The management team [was] treating it like it was both [members’] faults,” said a former barista who worked at the location at the time, and requested anonymity because of a non-disclosure agreement. It took the Wing over three months to formally respond to the incident. In a statement to Jezebel in August 2019, Gelman and Kassan vowed to “address racism head on with transparency and urgency, both internally and directly in our spaces.”
An exposé by the New York Times in March 2020 included accounts of mistreatment and disillusionment from 26 staff members. At one event, a white member reportedly eyed a photo board of Wing employees and remarked, “There’s a lot of colored girls that work here.” Members would often scream at employees or cry at them, and it was common for members to tell staffers that it was antifeminist to deny them whatever they wanted, the Times reported. (The former barista who spoke with Fortune recalled similar treatment from members.)
“It’s hard to hear that people have had this experience,” Gelman told the Times, vowing to overhaul the Wing’s structure, offer higher wages and extended benefits, and enforce a code of conduct for members.
Despite requests from the Wing’s leadership for open feedback, staffers say, management ignored their reports of member abuse.
“Whenever problems arose, the general managers in those locations were not quick to handle them,” says a Black former senior staffer who quit in June 2020, and requested anonymity because she signed an NDA.
Staffers grew frustrated with the Wing’s reporting portal, which sent complaints to the New York headquarters and rarely garnered a response. The former barista recalls unanswered complaints about inappropriate comments by kitchen staff, including use of the N-word. “Anytime we had complaints about them, we would go to management, they would tell us to message this portal, and it would just go into the void.”
Much of the space staff were people of color, whereas the corporate team was 40% people of color, according to the Times. Of the few that were promoted from spaces to corporate positions—an opportunity the Wing dangled when recruiting—most were white, according to Jezebel.
“I was one of, I believe, four women of color who were able to move from the spaces into headquarters,” says Michelene Wilkerson. She joined the front-desk team at the Wing’s Dumbo location in Brooklyn in 2018 and was promoted to the corporate brand partnerships team a year later. “You had this remarkable pool of talent that was never utilized,” says Wilkerson, “and I think that’s what broke so many people’s hearts.”
A leadership ‘transition’
Employee tensions that were already simmering boiled over as COVID hit and protests over the killing of George Floyd rocked the U.S. In June, the Wing pledged to donate $200,000 to Black Lives Matter; on the same day, it informed employees it didn’t have enough cash for the $500 grants it had previously said laid-off employees could apply for.
Amid the backlash, Gelman resigned as CEO, replaced by a new “Office of the CEO” made up of Kassan, senior vice president of operations Ashley Peterson, and senior vice president of marketing Celestine Maddy. Gelman retained an ownership stake of more than 10% of the company and remained on the board for another month. “My hope is that this accelerated transition will help rebuild trust, restore faith, and remake The Wing into something we can all feel proud of,” Gelman wrote in an email to staff. After her exit, employees staged a virtual walkout, demanding the company do more to live up to its mission.
To the Wing’s credit, some staffers were impressed with how it handled layoffs during COVID. Space staff were paid two months’ severance, compensated for unused PTO, and had their insurance extended for two months. “They handled it with a level of grace that I really was not expecting,” says Rachel, a former team member at a New York location who declined to share her last name.
Repeating past mistakes
In February 2021, flexible-office space pioneer IWG, based in Switzerland, bought a majority stake in the Wing for an undisclosed sum. Soon after, the Wing announced former Care.com founder and CEO Sheila Lirio Marcelo as its new chairwoman and established an advisory board “to provide the leadership team with essential guidance on operations and diversity as the company reopens its spaces.”
It reopened three New York City locations in May 2021 and seemed determined to start a new chapter. “I was impressed that in my first interview they mentioned the scandal,” says Carlin Traxler, who joined the Wing as a shift manager in Los Angeles in June 2021. “They were like, ‘This is what happened, we’re owning up to it and we want to change that.’ I found that enticing and impressive. Like cool, I’m glad you own up to your bullshit.”
But the company soon fell into the same old traps. Within weeks, leadership set sights on opening new spaces again, Traxler says. In the press release touting its NYC reopening, the Wing hinted at launching in new cities, despite eight of its existing locations still being closed. Corporate managers started asking space staff to come in on evenings and weekends for additional training after working nine-hour shifts, Traxler said.
Problems with members resurfaced as well. Traxler said 80% of the people she worked with were pleasant, but the remaining 20% either “treated you like you were the help” or “said things that were not appropriate.”
Once again, any concerns raised by space staff were ignored. A poster near the entrance listed “house rules,” but nothing happened when they were violated, Traxler says. “That lost a lot of trust with the staff. And that’s where people started checking out,” says Traxler. IWG declined to answer questions about member behavior, noting the Wing operated as a separate business.
The Wing vs. WeWork vs. Chief
The company suffered turnover among its leadership too. Kassan stepped down as CEO in February 2022 and was replaced by marketing chief Jen Cho, who herself stepped down five months later. She was replaced by IWG chief commercial officer Fatima Koning. Marcelo lasted 15 months as chairwoman. Cho, Koning, and Marcelo did not respond to Fortune’s requests for comment.
The Wing ultimately reopened only six of its 11 locations before shutting down entirely. Even at the clubs that did reopen, most of the amenities were closed as a precaution against COVID.
“We reopen with COVID; there’s no food, the restrooms you can use, but there’s no showers, no products, no anything. Just a bunch of sanitizer wipes,” says Traxler.
When member Nathalie Walton, cofounder and CEO of the fertility, pregnancy, and motherhood wellness app Expectful, visited the Wing’s San Francisco location in 2021, it was dead. “Whenever I would go in, it was really vacant. And I was thinking, how is this going to stay around?” she said.
When the company announced its final closure, it said it had been “unable to recover and grow the level of active membership and event activity necessary to run a financially sustainable operation.” In a statement, IWG CEO Mark Dixon said members increasingly told the company they would prefer suburban locations rather than the downtown ones that the Wing offered.
“Co-working is just like a hotel where you need the staff, the facilities, the amenities to draw people in,” says Vikram Malhotra, a senior analyst with Mizuho Americas. “Offices were not a high margin business to begin with, so if you’re spending a lot on marketing and facilities, all the consumables, coffee, printers, et cetera, that’s going to be an issue, especially if you don’t hit 70 to 75% occupancy. If you’ve not recovered occupancy-wise, the costs are just going to burn a hole.”
Other co-working spaces have adjusted to the post-COVID way of working. WeWork, a one-time Wing investor, said occupancy rates had hit 72% across its portfolio of 780 locations in 38 countries, in the quarter that ended June 30, a 4% increase from the prior period. Memberships were up 5% from the quarter before and 33% from the same quarter last year. WeWork has the advantage of serving corporate clients in addition to individuals and is benefiting as employers downsize their offices.
Chief, an Alphabet-backed networking group for female executives founded in 2019, has hit unicorn status and announced in early October that it’s opening a clubhouse in London. Chief’s membership fees are far higher than the Wing’s—ranging from $5,800 to $7,900 annually—and its community extends beyond its physical locations by offering virtual programming such as exclusive talks with Spanx founder Sara Blakely, Michelle Obama, and Gloria Steinem.
The former senior staffer says newer women-centered professional organizations that offer co-working and meeting spaces have benefited from witnessing the Wing’s missteps. Chief’s narrow focus on executives is one example. “The core issue with the Wing is they [didn’t] know who they were serving… [women are] a huge demographic,” she says.
The relaunched Wing also couldn’t shake the stigma of its past scandals. Members like Meg Massey in D.C. rethought their association with the brand after reading allegations of mistreatment of staff. “I didn’t observe [mistreatment],” she says. “But I’m a white woman. It really made me question, how was I complicit in this?”
Marcelo, for one, doesn’t list her Wing chairwomanship on her public LinkedIn page. Michelene Wilkerson, who left the Wing in July 2020, says she has since healed from her experience there. But she recalls navigating the aftermath of the company’s meltdown, describing frosty responses from people when she told them where she worked. “I kept running into people who were just not crazy about the Wing. So it’s like, as a Black woman, I [had] to carry the shame of shit I didn’t do,” Wilkerson says.
CLARIFICATION: This article was updated on Oct. 8, 2022 to provide more context for a source’s quote.
Archive: https://web.archive.org/web/2022101...com/2022/10/07/the-rise-and-fall-of-the-wing/
The rise and fall of the Wing: How a popular women’s co-working startup failed despite billionaire backers, a $365 million valuation, and a 35,000-person waiting list
BYPaige McGlauflinOctober 7, 2022 at 10:09 AM PDT
When female-focused co-working space the Wing laid off employees and closed 11 locations in spring 2020, it made a promise: “We’ll be back. And we’ll be better,” the startup said in a blog post.
In the end, neither statement was fully realized.
More than two years later, in August 2022, the Wing announced it was shutting down for good. It had reopened six locations after COVID, but the “operating environment” had proved “extremely challenging,” the company said in an email to members.
The email represented the culmination of the epic rise and tumultuous fall of a business built around what its founders once billed as a “women’s utopia.” Founded by Audrey Gelman and Lauren Kassan in 2016, the Wing saw its valuation peak at $365 million as investors like WeWork’s Adam Neumann, Sequoia Capital’s Jess Lee, and even soccer player Alex Morgan flocked to the mission of empowering women through community.
The space drew visits from the likes of Hillary Clinton, Alexandria Ocasio-Cortez, and Jennifer Lopez, and had a wait list tens of thousands of people long. Members were sold on the sisterhood of professionals, freelancers, and creative types the Wing had cultivated, its plush amenities, and its Instagrammable, millennial-pink interior that visitors likened to a womb.
But scandal chipped away at the Wing’s polished veneer. A 2019 lawsuit forced the Wing to drop its ban on membership by men, who were previously only allowed to visit as guests. Members and staff criticized management for mishandling an allegedly racist incident. Hourly employees, most of whom were Black or Brown women, went public with reports of mistreatment that contradicted the Wing’s uplifting, empowering brand. Gelman’s exit in June 2020 kicked off a round of CEO musical chairs. COVID forced the Wing to shut its locations and shed staff. A larger co-working company eventually bought a majority stake in the startup; under new ownership, the Wing staged an ambitious reopening of six locations in 2021 that lasted just months.
Gelman declined to comment for this story; Kassan did not respond to requests for comment.
Despite attempts to make up for past missteps, the Wing’s comeback collided with the tough economics of a shared office space market remade by the pandemic’s remote work revolution. But it also failed because the Wing seemed more devoted to expansion and its picture-perfect public image than building a workspace—and workplace—that lived up to its original mission. This account builds on past reporting by Fortune and others; for this account, Fortune contacted the founders, investors, and former executives and spoke with six former employees of the Wing and three former members of the co-working space.
The Wing’s origin story
The idea for the Wing dawned on Audrey Gelman, then senior vice president of public relations at public affairs and political consulting firm SKDK, in 2015 as she changed clothes in a Starbucks bathroom. Gelman dreamed up a business that offered on-the-go women a place to freshen up between appointments.
“They’re making self-driving cars. Why can’t we come up with a solution to this?” Gelman told Forbes in November 2016.
By the end of 2015, Gelman had raised over $2.5 million in seed funding supported by seven investors, including Serena Williams’s Serena Ventures. Investors were drawn to Gelman’s woman-focused concept—and to Gelman herself.
“Everyone’s like, ‘Oh, if you have the opportunity to back her, you should. She’s amazing. She’s a force,’” says Charlie O’Donnell, founder and general partner of Brooklyn Bridge Ventures and a seed investor in the Wing. “I got serious thumbs up all the way around. So I made a bet on her.” (Aside from O’Donnell, investors in the Wing declined or did not respond to Fortune’s request for comment.)
In 2015, Gelman connected with angel investor Alex Kassan, who declined to back the Wing but introduced Gelman to his wife Lauren, then-director of business development for ClassPass. Gelman and Lauren Kassan hit it off. Kassan joined Gelman as a founder and suggested expanding the Wing into a co-working space. The two divided business responsibilities—Kassan became chief operating officer, running the company day-to-day, and Gelman assumed the role of CEO, handling brand and creative.
The Wing’s first location opened in Manhattan’s Flatiron District in October 2016. Its second location, in SoHo, opened a year later. Inside, the spaces looked like a young feminist’s dream come true. They featured workspaces, showers, full restaurants, even a daycare—all of it luxurious and ultracomfortable, all of it in hues of pink. Members paid as much as $2,700 annually to access the co-working space and join the Wing’s exclusive club. Lines to get into the Wing’s spaces stretched around the block. Events boasting household names like Hillary Clinton and Meryl Streep as speakers drew hundreds of women.
The Wing fundraised at a breakneck pace. By the end of 2018 it had raised over $117 million from the likes of NEA, Kleiner Perkins, SoulCycle cofounders Julie Rice and Elizabeth Cutler, and WeWork.
Gelman’s profile grew too. She appeared on the cover of Inc. magazine while visibly pregnant, appeared in Chanel ads, and was featured in Fortune’s 2019 40 Under 40 list alongside Kassan and chief financial officer Diedra Nelson.
At its peak in early 2020, the company had 11 spaces in the U.S. and the U.K.—with plans for 20 by the end of that year—along with 500 employees, over 12,000 members, and a waitlist 35,000 long.
But as the business grew, expansion seemed to become the point, rather than a means to an end.
“There wasn’t a lot of transparency around what the strategy was at all,” said a former executive who asked to remain anonymous to speak openly about her previous employer. “Just having a cool place to work and free lattes wasn’t enough for us. That’s when it got frustrating. We were like, ‘Wait a second, what’s behind the curtain here? What are we doing?’” The Wing did not respond to multiple requests for comment.
O’Donnell says Gelman seemed reluctant to ask for help. “I don’t think [Gelman] leveraged her cap table of investors well. Once she started getting the big money from bigger investors, she just didn’t really make as much time for investor relations,” says O’Donnell. “Some of the small investors felt like they wanted to be helpful. She wasn’t really interacting with them. She said to me one time, ‘I’m busy running this company, and I’m going to make these folks a bunch of money.’”
O’Donnell partly blames the VC ecosystem that holds women to higher standards than men. “Being a female founder, you have to exude confidence,” he says. “And you have to make people feel like you’ve got this.”
Co-working controversies
The Wing had tapped into the post-2016 outrage among many American women who were fed up with systems of power built and controlled by the patriarchy. The Wing promised a safe space designed by women, for women. Its libraries were lined with books by only female authors. It offered lactation rooms and daycare services. Its thermostat was always set at a comfortable 72 degrees. It encouraged women to let down the guard that the world forced them to put up. So when the real-world experiences of members and employees didn’t meet the expectations the Wing set out, it wasn’t just a matter of bad service or poor employee relations. It felt like a violation of trust.
At the Wing’s West Hollywood location in May 2019, a white guest allegedly harassed member Asha Grant and her guest, both Black, over a parking dispute. Instead of removing the white woman from the premises, staffers told Grant they did not feel “empowered” to confront the woman. They offered Grant a free meal instead. The Wing confirmed the incident to Zora, a Medium publication for Black women, after it happened, and said the white woman originally accused Grant of using a homophobic slur against her, which Grant, a queer woman, “vehemently” denied. “In this specific incident, we struggled to get it right and we are deeply sorry,” the Wing said in a statement.
“The management team [was] treating it like it was both [members’] faults,” said a former barista who worked at the location at the time, and requested anonymity because of a non-disclosure agreement. It took the Wing over three months to formally respond to the incident. In a statement to Jezebel in August 2019, Gelman and Kassan vowed to “address racism head on with transparency and urgency, both internally and directly in our spaces.”
An exposé by the New York Times in March 2020 included accounts of mistreatment and disillusionment from 26 staff members. At one event, a white member reportedly eyed a photo board of Wing employees and remarked, “There’s a lot of colored girls that work here.” Members would often scream at employees or cry at them, and it was common for members to tell staffers that it was antifeminist to deny them whatever they wanted, the Times reported. (The former barista who spoke with Fortune recalled similar treatment from members.)
“It’s hard to hear that people have had this experience,” Gelman told the Times, vowing to overhaul the Wing’s structure, offer higher wages and extended benefits, and enforce a code of conduct for members.
Despite requests from the Wing’s leadership for open feedback, staffers say, management ignored their reports of member abuse.
“Whenever problems arose, the general managers in those locations were not quick to handle them,” says a Black former senior staffer who quit in June 2020, and requested anonymity because she signed an NDA.
Staffers grew frustrated with the Wing’s reporting portal, which sent complaints to the New York headquarters and rarely garnered a response. The former barista recalls unanswered complaints about inappropriate comments by kitchen staff, including use of the N-word. “Anytime we had complaints about them, we would go to management, they would tell us to message this portal, and it would just go into the void.”
Much of the space staff were people of color, whereas the corporate team was 40% people of color, according to the Times. Of the few that were promoted from spaces to corporate positions—an opportunity the Wing dangled when recruiting—most were white, according to Jezebel.
“I was one of, I believe, four women of color who were able to move from the spaces into headquarters,” says Michelene Wilkerson. She joined the front-desk team at the Wing’s Dumbo location in Brooklyn in 2018 and was promoted to the corporate brand partnerships team a year later. “You had this remarkable pool of talent that was never utilized,” says Wilkerson, “and I think that’s what broke so many people’s hearts.”
A leadership ‘transition’
Employee tensions that were already simmering boiled over as COVID hit and protests over the killing of George Floyd rocked the U.S. In June, the Wing pledged to donate $200,000 to Black Lives Matter; on the same day, it informed employees it didn’t have enough cash for the $500 grants it had previously said laid-off employees could apply for.
Amid the backlash, Gelman resigned as CEO, replaced by a new “Office of the CEO” made up of Kassan, senior vice president of operations Ashley Peterson, and senior vice president of marketing Celestine Maddy. Gelman retained an ownership stake of more than 10% of the company and remained on the board for another month. “My hope is that this accelerated transition will help rebuild trust, restore faith, and remake The Wing into something we can all feel proud of,” Gelman wrote in an email to staff. After her exit, employees staged a virtual walkout, demanding the company do more to live up to its mission.
To the Wing’s credit, some staffers were impressed with how it handled layoffs during COVID. Space staff were paid two months’ severance, compensated for unused PTO, and had their insurance extended for two months. “They handled it with a level of grace that I really was not expecting,” says Rachel, a former team member at a New York location who declined to share her last name.
Repeating past mistakes
In February 2021, flexible-office space pioneer IWG, based in Switzerland, bought a majority stake in the Wing for an undisclosed sum. Soon after, the Wing announced former Care.com founder and CEO Sheila Lirio Marcelo as its new chairwoman and established an advisory board “to provide the leadership team with essential guidance on operations and diversity as the company reopens its spaces.”
It reopened three New York City locations in May 2021 and seemed determined to start a new chapter. “I was impressed that in my first interview they mentioned the scandal,” says Carlin Traxler, who joined the Wing as a shift manager in Los Angeles in June 2021. “They were like, ‘This is what happened, we’re owning up to it and we want to change that.’ I found that enticing and impressive. Like cool, I’m glad you own up to your bullshit.”
But the company soon fell into the same old traps. Within weeks, leadership set sights on opening new spaces again, Traxler says. In the press release touting its NYC reopening, the Wing hinted at launching in new cities, despite eight of its existing locations still being closed. Corporate managers started asking space staff to come in on evenings and weekends for additional training after working nine-hour shifts, Traxler said.
Problems with members resurfaced as well. Traxler said 80% of the people she worked with were pleasant, but the remaining 20% either “treated you like you were the help” or “said things that were not appropriate.”
Once again, any concerns raised by space staff were ignored. A poster near the entrance listed “house rules,” but nothing happened when they were violated, Traxler says. “That lost a lot of trust with the staff. And that’s where people started checking out,” says Traxler. IWG declined to answer questions about member behavior, noting the Wing operated as a separate business.
The Wing vs. WeWork vs. Chief
The company suffered turnover among its leadership too. Kassan stepped down as CEO in February 2022 and was replaced by marketing chief Jen Cho, who herself stepped down five months later. She was replaced by IWG chief commercial officer Fatima Koning. Marcelo lasted 15 months as chairwoman. Cho, Koning, and Marcelo did not respond to Fortune’s requests for comment.
The Wing ultimately reopened only six of its 11 locations before shutting down entirely. Even at the clubs that did reopen, most of the amenities were closed as a precaution against COVID.
“We reopen with COVID; there’s no food, the restrooms you can use, but there’s no showers, no products, no anything. Just a bunch of sanitizer wipes,” says Traxler.
When member Nathalie Walton, cofounder and CEO of the fertility, pregnancy, and motherhood wellness app Expectful, visited the Wing’s San Francisco location in 2021, it was dead. “Whenever I would go in, it was really vacant. And I was thinking, how is this going to stay around?” she said.
When the company announced its final closure, it said it had been “unable to recover and grow the level of active membership and event activity necessary to run a financially sustainable operation.” In a statement, IWG CEO Mark Dixon said members increasingly told the company they would prefer suburban locations rather than the downtown ones that the Wing offered.
“Co-working is just like a hotel where you need the staff, the facilities, the amenities to draw people in,” says Vikram Malhotra, a senior analyst with Mizuho Americas. “Offices were not a high margin business to begin with, so if you’re spending a lot on marketing and facilities, all the consumables, coffee, printers, et cetera, that’s going to be an issue, especially if you don’t hit 70 to 75% occupancy. If you’ve not recovered occupancy-wise, the costs are just going to burn a hole.”
Other co-working spaces have adjusted to the post-COVID way of working. WeWork, a one-time Wing investor, said occupancy rates had hit 72% across its portfolio of 780 locations in 38 countries, in the quarter that ended June 30, a 4% increase from the prior period. Memberships were up 5% from the quarter before and 33% from the same quarter last year. WeWork has the advantage of serving corporate clients in addition to individuals and is benefiting as employers downsize their offices.
Chief, an Alphabet-backed networking group for female executives founded in 2019, has hit unicorn status and announced in early October that it’s opening a clubhouse in London. Chief’s membership fees are far higher than the Wing’s—ranging from $5,800 to $7,900 annually—and its community extends beyond its physical locations by offering virtual programming such as exclusive talks with Spanx founder Sara Blakely, Michelle Obama, and Gloria Steinem.
The former senior staffer says newer women-centered professional organizations that offer co-working and meeting spaces have benefited from witnessing the Wing’s missteps. Chief’s narrow focus on executives is one example. “The core issue with the Wing is they [didn’t] know who they were serving… [women are] a huge demographic,” she says.
The relaunched Wing also couldn’t shake the stigma of its past scandals. Members like Meg Massey in D.C. rethought their association with the brand after reading allegations of mistreatment of staff. “I didn’t observe [mistreatment],” she says. “But I’m a white woman. It really made me question, how was I complicit in this?”
Marcelo, for one, doesn’t list her Wing chairwomanship on her public LinkedIn page. Michelene Wilkerson, who left the Wing in July 2020, says she has since healed from her experience there. But she recalls navigating the aftermath of the company’s meltdown, describing frosty responses from people when she told them where she worked. “I kept running into people who were just not crazy about the Wing. So it’s like, as a Black woman, I [had] to carry the shame of shit I didn’t do,” Wilkerson says.
CLARIFICATION: This article was updated on Oct. 8, 2022 to provide more context for a source’s quote.
