Muji USA was formed in 2006 as a subsidiary of a Japan-based conglomerate that operates retail stores, campsites, cafes, hotels, model house builders and multiple other sectors, selling upwards of 7,000 products. The Muji brand was founded in Japan in 1980 as “an antithesis to the habits of consumer society at that time,” according to Muji USA’s chief restructuring officer, John Bittner, a senior managing director with Mackinac Partners.
“On one hand, foreign-made luxury brands were gaining popularity within an economic environment of ever-rising prosperity,” Bittner said in court papers. “On the other hand, poor-quality, low-priced goods were appearing on the market and had a polarizing effect on consumption patterns.” Muji became a “critique” of this state of things, with the aim of selling “products that are useful for the customer and maintain an ideal of the proper balance between living and the objects that make it possible,” Bittner added.
Minimalist stores, low prices and an array of products including home goods, beauty, apparel, food and more drew lines to some of Muji’s store openings in the U.S. A New York Times writer once called the retailer’s SoHo store “gloriously affordable.”
By the end of 2019, the U.S. subsidiary had more than 20 stores, and it was in financial trouble after overexpanding and picking high-rent spaces in choice locations. At the end of the year, it had a negative cash balance of $26.5 million in its loan arrangement with its parent, according to Bittner. The COVID-19 pandemic would force the company to close all of its stores, deepening its woes.
In bankruptcy, Bittner said the company aims to close some stores to rightsize its footprint, restructure its operations and grow its online presence. Muji USA plans to exit bankruptcy within six months.