Enjoy Technology, led by ex-Apple and JC Penney executive Johnson, files bankruptcy

Signs at the US Bankruptcy Court for the Southern District of New York in Manhattan, New York City, US, August 24, 2020. REUTERS/Andrew Kelly

June 30 (Reuters) – Enjoy Technology Inc (ENJY.O), the Silicon Valley retailer led by former Apple Inc (AAPL.O) and JC Penney Co CEO Ron Johnson, filed for bankruptcy protection Thursday, Less than nine months after going. Through a Special Purpose Acquisition Corporation (SPAC).

California startup Palo Alto said it plans to sell its US assets to Asurion LLC, a technology fix company.

Asurion has agreed to provide $55 million in financing so that Enjoy can operate while it is reorganized under Chapter 11 Creditor Protection with the US Bankruptcy Court in Delaware.

Founded by Johnson in 2014, Enjoy operates what it calls mobile retail stores that allow customers to purchase smartphones and other tech they can set up at home.

But in a lawsuit, the restructuring consultant said Enjoy struggled with low liquidity, in part because too many of the plumber’s investors got their money back, as well as a “supply chain crisis” and an inability to retain staff.

Enjoy said it only had $523,000 in cash on hand. It also said its British unit cut 411 jobs, or about 18% of the company’s total workforce.

Johnson became a prominent CEO overseeing the growth of Apple’s retail stores.

He became CEO of J.C. Penney in November 2011, but was fired 17 months later after his plan for a turnaround, emphasizing fixed prices and avoiding coupons, single customers used to get huge discounts.

SPACs, or blank screening companies, are fictitious listed entities that allow sponsors to bring private companies to the public faster than traditional initial public offerings.

Investors have pulled out in recent months from SPACs as the vehicles, which critics say are subject to conflicts of interest and shoddy due diligence, face tougher regulatory scrutiny. Read more

In afternoon trading, Shares of Enjoy fell 38.3% to 17.9 cents. They traded as high as $12.16 on October 12th.

(Jonathan Stemple reports) in New York. Editing by Richard Chang

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