Back in 2016, Ron Johnson was asked in a fireside chat at Shoptalk about the biggest mistake he had ever made. His response: “Going to JCPenney.” Prior to his failed stint as JCPenney’s CEO, Johnson was riding high as the chief architect of the Apple Retail concept and Target’s designer collaborations. Six years later, Johnson might answer that question differently — his “commerce-at-home” startup Enjoy Technology filed for bankruptcy on June 29, 2022, after a series of setbacks including staffing shortages and dwindling liquidity.
Enjoy will continue operating throughout the bankruptcy process but will wind down its operations in the UK, according to an SEC filing. The ultimate plan is to sell to the highest bidder. To fund its operations throughout the Chapter 11 proceedings, Enjoy has received a $2.5 million bridge loan and a financing commitment of $55 million from tech services company Asurion. If approved, Asurion will be the stalking horse bidder in a bankruptcy auction.
Johnson co-founded Enjoy in 2014 after leaving JCPenney and currently serves as its CEO. The idea was to bring the store experience to consumers’ homes via a technology-powered “mobile store” operation, with an initial focus on telecommunications and consumer electronics (AT&T and Apple are partners in the U.S.). Johnson had hoped to expand into new categories and markets, but the tides quickly turned after the company went public via SPAC in October 2021. Enjoy’s stock has steadily declined since its NASDAQ debut, from a high of $11 to $0.21 as of July 1, 2022.
Additionally, cash flow became a problem as the company was hit hard by the broader tech selloff at the beginning of this year. The fact that Enjoy also had recently beefed up its staffing and warehouse footprint in anticipation of expansion didn’t help matters. The company lost two CFOs within two months earlier this year, most recently interim CFO Cal Hoagland, who left the company June 1. In mid-May Enjoy launched a “review of strategic alternatives” and warned that it might not have enough cash to last through June.
Even as the company itself moves through bankruptcy proceedings, this may be just a delay for an innovative retail concept that has been the victim of bad timing, underinvestment or poor management.