Bankrupt Muji U.S.A. Closing California Stores

Muji will close its California stores but hopes one day to bring brick-and-mortar back to the state.

By David Moin on July 31, 2020 Women's Wear Daily.

The Muji storefront on East 59th Street in Manhattan.  George Chinsee/WWD

Muji U.S.A., one of the many retail victims of COVID-19, will permanently close all seven of its stores in California as part of the company’s Chapter 11 restructuring.

The locations are in Los Angeles on the Third Street Promenade, Hollywood, Santa Anita, Stanford, San Jose, Santa Monica and San Francisco.

The Chapter 11 filing in Delaware by Muji U.S.A on July 20 does not impact the Japanese retailer’s operations in Canada, Japan, and elsewhere around the globe, the company said.

Muji plans to use the court-supervised Chapter 11 process “to navigate the impacts of COVID-19 on brick-and-mortar retail and to reposition the brand’s e-commerce business as customer behavior has shifted to online shopping as a result of the pandemic.”

Satoshi Okazaki, chief executive officer of Muji U.S.A. commented, “At Muji we are so thankful for our customers and the community who have supported our stores throughout the years. We are especially grateful to our California community. As we work through the restructuring process, we hope to someday bring brick-and-mortar Muji stores back to California, and look forward to serving our California customers online in the meantime.”

Muji is known for its clean Asian aesthetic, multifarious merchandising and moderate prices. The stores average around 8,000 square feet and sell everything from plants, stationery, refillable gel pens, mattresses and sheets, to skin care, cleaning systems, marshmallows, containers, cookies and curry, as well as men’s, women’s and kids wear, and sandals.

When the company filed for Chapter 11 restructuring, it said it would close “a small number of its brick-and-mortar stores” as it focuses more on its online offerings.

Prior to the coronavirus outbreak, Muji had ambitious expansion plans for the U.S., considering opening 100 locations in five years, as well as a hotel on the West Coast. The California closings leave about 12 Muji stores continuing to operate.

COVID-19 aside, Japanese retailers have a poor track record in America. Takashimaya, Mitsukoshi, Itokin and Isetan all came and went, and business at Uniqlo, Muji’s biggest competitor globally, has been tough in the U.S., outside of major urban areas.

However, Muji stores did seem to be gaining acceptance, with good traffic seen at its Fifth Avenue and Hudson Yards stores in Manhattan prior to the pandemic, possibly due to its relatively small reliance on the fickle fashion category and its inexpensive, home and gift-oriented assortment.