Minimalist home goods retailer Muji has become the latest casualty of the coronavirus pandemic after the company filed for chapter 11 bankruptcy in the U.S. last Friday.
The Japanese retailer’s U.S. business owes more than $50 million in liabilities to more than 200 creditors, according to the company’s bankruptcy filings. Muji’s parent company Ryohin Keikaku Co said that the company plans to renegotiate the rents of its 18 U.S. stores that have largely remained shut since mid-March and will permanently shutter the ones that have remained unprofitable.
Ryohin Keikaku said that the company’s bankruptcy filing in the U.S. won’t have any impact on its operations elsewhere, but the company is also facing a fair share of problems in its primary market Japan due to store closures and consumers continuing to spend conservatively. The company reported a total operating loss of 2.9 billion yen ($27.2 million) for the quarter through May, according to Reuters.
Before the pandemic began, the company was reportedly outperforming several of its competitors, including Adastria and United Arrows, but the problems began when Ryohin Keikaku had to close stores, which dried out the company’s revenue stream. The company joins several other retailers in the home improvement category who have recently gone belly up. Last week, kitchenware retailer Sur La Table also filed for bankruptcy after struggling with sales and facing pressure from its landlords to make rent.