Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Muji USA Files for Chapter 11 Bankruptcy

Even before the pandemic hit, the Japanese retailer's US unit had been operating at a loss for the past three fiscal years.
By
  • Bloomberg

NEW YORK, United States — The US entity of Japanese retailer Muji, known for its minimalist home goods, filed for bankruptcy, adding to a growing list of industry companies reeling from the Covid-19 pandemic.

Muji USA Ltd., which is operated by Ryohin Keikaku Co., filed for Chapter 11 in Delaware, according to a filing. It listed assets and liabilities in the range of $50 million to $100 million, and estimated the number of creditors at 200 to 999.

Ryohin Keikaku said in a separate statement that Muji USA filed for bankruptcy due to shutdowns from the coronavirus. The company had been grappling with losses due to high rent and other costs, and was taking steps to improve sales and renegotiate rents before the pandemic hit, it said.

Muji’s US unit joins more than 110 companies that have declared bankruptcy in the US this year and blamed the coronavirus crisis in part for their demise. Read more about that here. The pandemic has hit retailers around the globe as stores closed as part of the effort to mitigate its spread. Monthly same-store sales at Ryohin Keikaku’s Japan outlets fell by about a half during a state of emergency in the country during April and May.

ADVERTISEMENT

In the last fiscal year, sales from US operations, where there are 19 stores, made up about 2.5 percent of Ryohin Keikaku’s revenue. The US business has been operating at a loss for the past three fiscal years. Last year, it had a loss of around $10 million, according to its bankruptcy statement.

Despite growing rapidly in the past decade through international expansion focused on China, Muji has recently hit some bumps. For one, its minimalistic and simple products are easy to knock off, prompting a slew of cheaper copycats that have dented sales. The coronavirus pandemic and store shutdowns have further damped business — on Friday, Ryohin Keikaku reported an operating loss for the three months ending in May, its first in more than a decade.

By Max Zimmerman and Lisa Du

In This Article
Topics
Organisations

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Analysis and advice from the front lines of the retail transformation.

Brands Owed Millions After Matchesfashion Collapse

Designer brands including Gucci and Anya Hindmarch have been left millions of pounds out of pocket and some customers will not get refunds after the online fashion site collapsed owing more than £210m last month.


Op-Ed | How Long Can Adidas Surf the ‘Terrace’ Trend?

As a push to maximise sales of its popular Samba model starts to weigh on its desirability, the German sportswear giant is betting on other retro sneaker styles to tap surging demand for the 1980s ‘Terrace’ look. But fashion cycles come and go, cautions Andrea Felsted.


How Rent the Runway Came Back From the Brink

The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
The Business of Beauty Global Awards - Deadline 30 April 2024
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
The Business of Beauty Global Awards - Deadline 30 April 2024