Muji USA Ltd. has filed for bankruptcy in Delaware, yet another retailer attributing financial difficulties to the continuing coronavirus pandemic.
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The U.S. unit of the Japanese lifestyle and apparel brand indicated on 10th July that it plans to use the bankruptcy process to restructure and to pivot more toward online shopping. The strategy reflects the general trend among traditional retailers concerned about the future of their physical stores, particularly during a pandemic that has led to temporary store closures and warnings by public health officials about the likelihood of contagion through crowds in public and indoor spaces.
“Muji has felt the devastating effects of the COVID-19 pandemic on in-store retail, and as a result will take this opportunity to refocus our efforts in the United States on key regional markets and e-commerce. We remain committed to bringing the best of Japanese lifestyle products to our American customers, and hope to swiftly bring this restructuring to a close in order to better serve them,” Muji USA’s chief executive officer Satoshi Okazaki said in a statement on 10th July.
The company said it is in talks with lenders and others about the planned restructuring, and that its physical stores in the U.S. and online stores are still open in the meantime. The bankruptcy filing does not affect the company’s business outside the U.S., according to Muji’s statement.
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. Its main unsecured creditors are landlords, including Kent & Wythe Owners LLC in New York City, who are owned more than $273,600 and Westland Garden State Plaza Limited Partnership in Los Angeles, who are owed more than $262,000.
The company also said that it plans to close “a small number of its brick-and-mortar stores” as it focuses more on its online offerings.
“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.
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The company had previously said last August that it planned to expand in North America, and open some 100 locations in the U.S. over the next five years.
(Source: Yahoo News)