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Bankruptcy Strikes Muji’s US Business, 18 Stores at Risk

The U.S. arm of Japanese retailer Muji on Friday filed for bankruptcy court protection.

The voluntary Chapter 11 petition, filed in a Delaware bankruptcy court under the name Muji U.S.A. Ltd., estimated at least 200 creditors.

The seller of minimalist home goods, personalizable apparel, personal care items and more is 100 percent owned by Tokyo-based firm Ryohin Keikaku Co. Ltd. Among its top 20 largest creditors holding unsecured claims, most—in fact, the top seven holders of claims—are landlords who are owed nearly $1.2 million. The petition also said it had assets of at least $50 million, with minimum liabilities of the same amount.

Muji’s fashion assortment includes a range of basics and essentials ranging from men’s and women’s apparel and innerwear, a linen collection, denim and footwear. Women’s linen dresses are priced between $39.90 and $49.90, and flip-flops start at $9.90. Many products are produced with organic cotton.

Like all nonessential retailers in mid-March, the company temporarily shut its 18 U.S. doors after state and local governments mandated shelter-in-place orders to help curb the spread of the COVID-19 outbreak. COVID-19 started its spread in Wuhan, China, in January before heading to other Asian nations, including Japan. And many U.S. stores in February and early March began looking sparse because they couldn’t get shipments of goods from overseas.

The restructuring process is expected to refocus sales online. Reuters on Friday said the parent company plans to close unprofitable stores and renegotiate rents on its U.S. leases. Operations outside of the U.S. are not impacted by Friday’s bankruptcy filing.

Muji was founded in Japan in 1980, according to the company’s website. Its full name is Mujirushi Ryohin, which translates to “no-brand quality goods.” Its products are designed with a manufacturing process creating simple, low-cost, good quality products that are nature-oriented and “resource-saving,” the company said. The retailer has more than 700 Muji stores around the world, carrying more than 7,000 items.