Hundreds of workers have been made redundant as the retail start-up Enjoy Technology, run by former Apple executive Ron Johnson, filed for bankruptcy.
A video has been circulated showing him announcing the mass redundancies to employees over Zoom. He said everyone working for the brand in Canada and Britain would lose their job.
The company based in Palo Alto, Califronia, was founded in 2014 by Mr Johnson, better known as the co-creator of Apple’s retail arm and for a turnaround of JC Penney Corp. He lent $10 million (£8.3m) to Enjoy shortly before the bankruptcy to help enable the company’s sale, court papers show.
Mr Johnson told them the outcome of a consultation had “resulted in redundancies for all UK employees” as well as those in Canada. The 400 people employed in the UK account for 18 per cent of Enjoy's workforce.
“Regrettably, I am informing you that Enjoy’s board is serving all UK employees with notice of redundancy today,” he said.
“I understand that this is not the outcome that any of us wanted.”
He said it had been “challenging” for the company “to get the unit economics right” while trying to build up the brand in Britain.
“Unfortunately, we will also close our Canadian operations as of today,” he said, as the company did not “see a profitable path forward in Canada as well”.
The company plans to continue operations and sell itself to Asurion LLC while in Chapter 11 bankruptcy, court papers show. Asurion has agreed to lend $52.5m (£43.6m) to fund the case.
Enjoy has struggled to raise the capital needed to fund its operations in recent years, according to court papers. The half-delivery start-up, half-tech-support company operates what it calls mobile retail stores that help consumers buy and set up technology gadgets, such as mobile phones, in their homes.
The company is now seeking protection from creditors “due to a rapidly declining cash position that has rendered them unable to pay operating expenses, including payroll”, Enjoy’s lawyers wrote in bankruptcy court filings.
Last year it went public by way of a merger with a so-called special-purpose acquisition company, namely Marquee Raine Acquisition Corp. The move brought in $112.6m (£93.5m) of fresh capital after the repayment of certain loans and transaction costs, court papers said.
On its website, Enjoy is described as a platform reinventing "commerce at home" to bring the best of the tech store to customers. It says the firm "has pioneered a new retail channel that can do everything that a traditional retail experience offers, but better".
The company has been contacted for comment.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The winners
Fiction
- ‘Amreekiya’ by Lena Mahmoud
- ‘As Good As True’ by Cheryl Reid
The Evelyn Shakir Non-Fiction Award
- ‘Syrian and Lebanese Patricios in Sao Paulo’ by Oswaldo Truzzi; translated by Ramon J Stern
- ‘The Sound of Listening’ by Philip Metres
The George Ellenbogen Poetry Award
- ‘Footnotes in the Order of Disappearance’ by Fady Joudah
Children/Young Adult
- ‘I’ve Loved You Since Forever’ by Hoda Kotb
6 UNDERGROUND
Director: Michael Bay
Stars: Ryan Reynolds, Adria Arjona, Dave Franco
2.5 / 5 stars
