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.