Muji Placed Under Chapter 11

Japanese homewares and lifestyle retailer Muji has placed its US business in Chapter 11 bankruptcy protection with debts of US$64 million.

The company said the measure was the result of having to continue to pay rent in high-profile locations while stores were shuttered due to the Covid-19 pandemic. Landlords had shown little flexibility despite stores not being able to trade.

Under bankruptcy protection, the company’s parent, Ryohin Keikaku, has six months to submit a restructuring plan.

After launching in 2006, Muji US has opened just 19 stores there. But it chose high-profile locations like 5th Avenue and Times Square to establish brand exposure.

In the year to February, the company achieved sales of $102.5 million but reported a loss of $16.8 million.

Muji has no intention of closing or exiting the US where it is considered a cornerstone in building name recognition. Muji US has reopened 10 stores, but total sales are running at just 20 percent of the level of pre-Covid-19.