Next act for Apple veteran Ron Johnson makes home delivery startup public

Ten years after leaving his role as Apple Inc.

best seller and eight years after an inglorious tenure as CEO of JC Penney, Ron Johnson wants to remake the world of retail.

Mr Johnson, 63, runs a company called Enjoy Technology Inc. which aims to solve an emerging problem for high-end electronics manufacturers and luxury brands. Many of these companies pay special attention to the customer experience, only so that the end product, if delivered, arrives in a cardboard box thrown on the doorstep. He built his business to bring high end shopping to the living room.

Its success could affect the future of online shopping. It will affect his legacy as well, whether he is remembered as a retail pioneer with a stumble at JC Penney, or someone who did his best at Apple to struggle afterward.

“He’s back on track,” said Gene Munster, managing partner of venture capital firm Loup Ventures, an investor in Enjoy. Mr Munster said he believed in Mr Johnson’s latest vision and that if the company could achieve it, “It will be bought out.”

Enjoy is a marriage between a delivery service in white gloves and an army of door-to-door salespeople. Mr Johnson has busy teams across the US, Canada and UK, hand-delivering iPhones and other gadgets to customers’ homes on behalf of Apple, AT&T Inc.

and other partners. Then they use delivery as an opportunity to sell more. In September, Enjoy announced that it was expanding delivery from Apple to a total of 14 metropolitan areas in the United States.

Mr Johnson aims to take the company public next week through a Special Purpose Acquisition Company, or SPAC, at a valuation of more than $ 1 billion. The merger vote is scheduled for Wednesday.

Enjoy’s more than 1,000 delivery people, whom the company calls experts, are recruited from luxury retail environments, such as Apple and Tesla. Inc.

Each receives over 120 hours of training and is sent out around the world with a Mercedes van full of goods. A customer orders an iPhone through Apple’s online store, for example, but chooses free home delivery and support through Enjoy. The Enjoy employee arrives, helps the user set up the device, and then takes the opportunity to sell additional services, such as Apple TV +, or devices, such as a smartwatch.

Ron Johnson at Enjoy’s offices in Palo Alto, California. The company is targeting $ 1 billion in sales by 2025.

“There are a lot of people who can deliver at the door,” Mr Johnson said in an interview. “We are the only one who has built the vision to truly generate added value for partners when walking through the door. “

This incremental sale is the key to Enjoy’s success. Twenty percent of the company’s revenue comes from being paid to make deliveries, while the path to profitability in 2023 is through upselling customers, Mr Johnson said. The challenge for Enjoy is that its initial relationship with the customer stems from a sale by Apple or other partners, and its success depends on customers who want in-home service and their desire to buy more. Another risk is if Apple or Amazon.com Inc.

decides to use his corporate war chest to replicate such a service, undermining it in the market.

Mr Johnson said it was difficult to create such a network. And that is why he is accelerating his efforts to grow taller.

Enjoy is one of many companies taking advantage of the PSPC frenzy. Investors have invested billions of dollars in these so-called blank check companies, which are traded on the stock exchange for the purpose of merging with a private company like Enjoy.

Unlike other companies that went public through PSPCs this year, Enjoy has revenue, although it lost $ 158 million last year. The company has grown, with revenue this year expected to hit $ 109 million from $ 15 million in 2018, according to filings with the Securities and Exchange Commission. The company says it will be profitable in 2023 and announces to investors that it plans to reach $ 1 billion in sales in 2025.

Its SPAC agreement with Marquee Raine Acquisition Corp.

RMCA -4.62%

, whose backers include Chicago Cubs owner Tom Ricketts, is expected to inject more than $ 450 million into the company to fund these growth plans, including expanding operations to 100 markets in North America . Since its launch in 2014, Enjoy has raised $ 350 million, notably from venture capital firm Kleiner Perkins.

“I was a bit arrogant about the situation.”


– Ron Johnson, on his tenure as CEO of JC Penney

It was Mr Johnson’s nearly 12 years at Apple that made him a star in the retail world, chosen by the late Steve Jobs to shape the company’s store strategy after the success at Target. . Corp.

Mr Johnson oversaw the opening of around 400 Apple stores that turned the technology-buying experience upside down. Apple has chosen prime locations and devoted half of the airy spaces to teaching users how to use their devices in so-called Genius Bars. From Tesla to Microsoft Corp.

, the approach generated copy chats.

His vision of retail as a leader of JC Penney did not go so well. Introduced to revitalize the department store chain in 2011, Mr Johnson wasted no time trying to put his stamp on things, abandoning the company’s long-standing strategy of aggressively touting merchandise as ” on sale ”and cut out department store layouts to create in-store stores for popular brands.

After 17 months, however, few were happy. Sales were down, investors were getting impatient, and he left.

Mr Johnson said he doesn’t appreciate the patience it takes to lead the turnaround of a mature business, although he believes parts of his strategy of focusing on beloved brands with stores at inside stores have since been justified. “I went too fast for the employees, too fast for the board, too fast for the client,” he said. “I was a bit arrogant about the situation.”

The retailer has continued to struggle, filing for bankruptcy last year amid problems made worse by the pandemic; it now operates with new owners and the name JCPenney. The retailer declined to comment.

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One of the first challenges for Enjoy was how to grow the business. The company touts its Asset-lite approach. To bring the store into the house, Enjoy uses delivery vans which are in fact its stores, which can hold up to 500 products. The back-end of operations is supported by in-house software to coordinate the consigned stocks in Enjoy’s warehouses and the available delivery slots. Mr Johnson’s goal is to have 15 minutes between when a customer makes an online purchase and when delivery takes place.

Among its most important costs is labor. As Enjoy grew, the likes of Uber Technologies Inc.

and DoorDash Inc.

recorded strong growth with on-demand services using independent providers. Mr Johnson opposed such a business model, insisting that Enjoy’s delivery staff consist of full-time employees trained in the specifics of the operation.

“You have to have an employee to build a business that you can run on with real high quality standards,” Mr. Johnson said.

First, the company signed AT&T to deliver phones, but it wasn’t until 2020 that Enjoy landed a trial contract to deliver iPhones for Apple to the San Francisco area in June of the. same year.

Covid-19 threatened to set aside years of work as the pandemic closed businesses in the United States during quarantines and social distancing. Mr Johnson looked: Would customers be open to a stranger coming to their home to deliver an iPhone?

“Three weeks after the world closed, when the stores were closed and we could [still] delivering an experience and customers loved it – I knew we were going to be part of the future, ”he said.

Write to Tim Higgins at [email protected]

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