MUJI USA Files for Bankruptcy After Running at a Loss for 3 Years

Muji U.S.A Ltd. filed for bankruptcy in a statement posted on Friday due to substantial losses from COVID-19.

The minimalist Japanese retail company under Ryohin Keikaku Co., selling everything from household items, to garments, furniture, stationary and more, aims to “restructure its businesses.”

COVID-19 impact: Muji filed for Chapter 11 due to a number of reasons, with losses suffered in the U.S. pushed further by the pandemic.

  • The filing “listed liabilities of $50 million to $100 million, owed to between 200 and 999 creditors,” according to CNN.
  • COVID-19 greatly affected sales with Ryohin Keikaku reporting “an operating loss of 2.9 billion yen ($27.2 million) for the quarter through May,” according to Reuters.
  • Bloomberg also reported that according to its 2019 sales, “the U.S. 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.”
  • This can also be seen in Ryohin Keikaku’s 2019 fiscal year briefing, in Europe and the U.S., where businesses in those locations struggled and “dropped into the red due to unachieved sales targets.”
  • Ryohin Keikaku President Satoru Matsuzaki said, “I will personally realize the restructure in the U.S,” according to

International Mujis: A Forbes article mentioned how Muji isn’t necessarily doing well overseas as well, with its failure to predict demand, hoarding unsold inventory stock and refusal to mark it down, and political tensions within Asian nations where the storefronts are located.

  • In response to questions of stores elsewhere, such as Canada, Muji responded saying, “operations in Canada will not be impacted.”
  • Muji Japan already moved swiftly to e-commerce in May and featured 250 items from its large collection, according to Insideretail.
  • In a separate statement on Friday via Sapna Maheshwari of the New York Times, the company shared that the restructuring efforts focus only on the U.S., and “MUJI international operations in Japan, and elsewhere around the globe will not be impacted.”

Optimism and shared sadness: Contrary to what some may believe, filing for Chapter 11 does not mean the business will immediately shutter all its doors. One of the directions the retail company will take is focusing on e-commerce.

  • Filing for Chapter 11 protects a business from immediate closure because within that timeframe, the debtor can propose a “plan of reorganization to keep its business alive and pay creditors over time,” according to United States Courts. It is Chapter 7, where liquidation of assets most likely calls for closure.
  • A portion of Muji’s products can be found on Amazon and its operating retail locations and MUJI U.S. online store will remain open with COVID-19 precautions in place.
  • As Muji supporters learned of the news, many in the community expressed their sadness in finding out that some of the physical stores might close.

Feature Image via Getty

Support our Journalism with a Contribution

Many people might not know this, but despite our large and loyal following which we are immensely grateful for, NextShark is still a small bootstrapped startup that runs on no outside funding or loans.

Everything you see today is built on the backs of warriors who have sacrificed opportunities to help give Asians all over the world a bigger voice.

However, we still face many trials and tribulations in our industry, from figuring out the most sustainable business model for independent media companies to facing the current COVID-19 pandemic decimating advertising revenues across the board.

We hope you consider making a contribution so we can continue to provide you with quality content that informs, educates and inspires the Asian community. Even a $1 contribution goes a long way. Thank you for everyone’s support. We love you all and can’t appreciate you guys enough.

NextShark is a leading source covering Asian American News and Asian News including business, culture, entertainment, politics, tech and lifestyle.

For advertising and inquiries: info@nextshark.com