Muji U.S.A. files for bankruptcy, citing pandemic shutdowns

The U.S. 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 U.S.A Ltd., which is owned by Japanese retailer 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 U.S.A. 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 rent before the pandemic hit, it said.

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

In the latest fiscal year, sales from U.S. operations made up about 2.5 percent of Ryohin Keikaku’s revenue. 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 the 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 copy cats that have dented sales.