Muji's US business seeks bankruptcy protection over coronavirus

Andrew Cummings
July 12, 2020

Muji USA filed for bankruptcy on Friday, the latest retailer to take a hit from the coronavirus.

"Muji's customers will continue to be able to purchase its popular stationery, clothing, and home goods, and Muji will endeavor to maintain a positive, enjoyable and safe in-store experience during the COVID-19 pandemic and beyond", the company said in its statement.

Muji has become the latest retailer to lose the handle on its balance sheet amid the coronavirus pandemic.

Ryohin Keikaku said the United States filing will not affect its operations in other markets.

In the US, Brooks Brothers, a clothier with 200-year history, filed for bankruptcy protection on Wednesday, also a victim of the crisis.

But the business has also been hit by store closures and weak consumer spending in its main market, Japan. But over time, Muji expects to start closing brick-and-mortar stores to focus on e-commerce.

The company has listed assets between $50 million and $100 million, and liabilities within the same range, according to the company's Chapter 11 filing in Delaware.

In the last fiscal year, sales from USA operations, where there are 19 stores, made up about 2.5% of Ryohin Keikaku's revenue.

In the last fiscal year, Muji's US entity suffered a loss of around $10 million. Last year, it had a loss of around US$10 million (S$13.95 million), according to the statement.

Despite growing rapidly in the past decade through worldwide expansion focused on China, Muji has recently hit some bumps.

Separately, yesterday, Ryohin Keikaku reported an operating loss of 2.9 billion yen (S$37.8 million) for the quarter through May.

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