Enjoy Technology Inc., a retail startup founded by former Apple executives, filed for bankruptcy protection Thursday, less than a year after going public.
June 30, 2022 20.46
Enjoy Technology Inc., a retail startup founded by former Apple Inc executives. Ron Johnson, filed for bankruptcy protection Thursday, less than a year after going public.
The company plans to continue operating and sell itself to Asurion LLC while it is in Chapter 11 bankruptcy, court documents show. Asurion agreed to lend $52.5 million in new money to fund the Chapter 11 case.
Enjoy operates what it calls a mobile retail store that helps consumers shop and set up technology devices, such as cell phones, in their homes.
The Palo Alto-based company, which was founded in 2014, has had difficulty raising the capital needed to finance its operations lately, according to court documents.
The company is now seeking protection from creditors “because of a rapidly declining cash position that prevents them from paying operating expenses, including payroll,” Enjoy’s attorney wrote in a bankruptcy court letter.
Enjoy has started laying off more than 400 UK employees, or about 18% of its total workforce, in connection with bankruptcy, a regulatory filing shows.
Enjoy went public last year through a merger with so-called special-purpose acquisition firm Marquee Raine Acquisition Corp.
The move generated $112.6 million in fresh capital after payment of certain loans and transaction fees, according to court documents. . Enjoy was one of many to be hit by high investor redemption rates, when SPAC investors backed out of deals they didn’t like, leaving them with a smaller cash cut than previously thought.
Johnson, the company’s CEO, founded Enjoy in 2014.
He is best known as the co-creator of Apple’s retail arm and for the restructuring efforts of JC Penney Corp. Johnson lent Enjoy $10 million shortly before bankruptcy to help facilitate the sale of the company, court documents show.
Ron already saw some advantages in running a physical shop due to the simple fact that there are some who choose to do that after completing his studies at Harvard Business School (the institution where he continued his studies after graduating from Stanford). She said that she “loves walking around the shops,” and that she turned down a white-collar job at the Mervyn chain store so she could learn how logistics work by helping out as a warehouse clerk.
Enjoy’s filing for bankruptcy comes just weeks after electric vehicle startup Electric Last Mile Solutions Inc. filed for Chapter 7 bankruptcy, suggesting that more de-SPACs may need to go out of business.
And from there, after advancing several positions in the chain and at Target, he accepted a proposal from Steve Jobs to create an Apple Store experience. Ron started”with a list of eight or ten things that would define it“and that the then CEO of Apple I agreed without a second thought:
There is no compromise for intuition. And that’s what allows the Apple Store to connect with its customers. Still today people go to that store just to go, not to buy. There are many reasons to go…
And it’s true: The Apple Store has not only become a classic business location to buy Apple products and receive support, but they too meeting point for people from the area. The simple fact of having free, completely open Wi-Fi helps, and it’s put right at the start so any pedestrian can log in and view any webpage or mail.
But today the reality is different for Johnson
Overall, there are more than 35 former SPACs trading under $1 and at least 65 likely to need more financing over the next year just to stay afloat, according to Bloomberg data estimating the company’s cash needs.
The case is Enjoy Technology Inc., 22-10580, US Bankruptcy Court for the District of Delaware.
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