JAPANESE BRAND MUJI FILED FOR BANKRUPTCY

The corporation operating in different countries under the motto “no logo” filed a bankruptcy petition in the US court. Muji expects to use the Bankruptcy Code (Chapter 11) for further reorganization of its operations. The management plans to focus on the sale of goods online, while maintaining the style and characteristics of the corporate policy of the company.

The name Muji represents the beginning of the Japanese phrase “Mujirushi Ryohin”, which means non-brand products of high quality. A feature of the company’s policy is the production and sale of products in the spirit of minimalism, which is reflected both in the palette of colors used and in the packaging minimalism. The company operates not only in Japan and the USA, but also in many countries of Asia and Europe, as well as in Canada and Australia. It produces travel products, small electronics, gadgets and accessories, as well as household products, including furniture.

Even Muji's parsimonious policies, which assumed to spend almost no money on advertising and traditional marketing channels, were unable to withstand the effects of the COVID-19 pandemic that swept the US markets.

According to the analysts, the Japanese conglomerate Ryohin Keikaku, which owns the brand, showed a loss of $ 27.2 million in January-March 2020.

Given that since the end of March, the activity of the company's stores in the United States has been completely terminated, the decision on filing for bankruptcy has become very appropriate in this situation. For the moment, more than 9,400 outlets are being closed in the North American market alone, almost as much as it was closed over the entire past year. In 2018, only 5,700 stores were closed in the United States.

Can the company cope with the current crisis by transferring its resources to e-commerce? According to the company’s CEO Satoshi Okazaki, it is judicial protection that will redirect the forces of the corporation to the key regional markets of the US.

The company is likely to “say goodbye” to some of its outlets.

Nevertheless, the concept of development through the “word-of-mouth” marketing can bring positive results in the field of online sales, say the experts. Thus, Muji can relieve itself of the debt burden by closing those areas of activity that caused losses and focus on the profit.