(Financial World) The retail industry was hit by the epidemic and the U.S. subsidiary of MUJI applied for bankruptcy protection
China News Agency, Beijing, July 11 (Liu Liang) Affected by the new coronary pneumonia epidemic, a Japanese retail giant "falls down" in the United States.
Japanese retail giant MUJI (MUJI) parent company Liangpin Co., Ltd. said on Friday that the US subsidiary of MUJI was hit hard by the epidemic. The US subsidiary has filed for bankruptcy protection and plans to close part of it permanently. Unprofitable stores, but this move does not affect the normal operation of other markets around the world. It is reported that the company's debt listed in the bankruptcy application is as high as 64 million US dollars.
Established in 1980, MUJI is a Japanese retail company with global operations. As a retail brand that promotes a minimalist lifestyle, the products it sells include all kinds of household consumer goods, furniture, clothing and food.
In recent years, MUJI U.S. subsidiaries have continued to suffer losses. Judging from the company's financial data for the past three years, MUJI's operations in the United States are not optimistic.
According to company financial reports, MUJI entered the United States in 2007 and currently has 19 stores across the United States. In the most recent fiscal year, the total sales from the US business accounted for about 2.5% of the revenue of the good product plan, but in the past three fiscal years, the US market has been in a state of loss. According to its bankruptcy statement, the US subsidiary lost about $10 million last year.
The continued spread of the US epidemic became the last straw to overwhelm the camel. Under the impact of the epidemic, since mid-March this year, many MUJI stores in the United States were forced to suspend operations, and U.S. operations continued to suffer losses.
According to the announcement of the Liangpin plan on the official website, although the MUJI U.S. subsidiary took measures to expand its customer base and coordinate rents to improve its business during the epidemic, many stores had to be forced to close due to the continued spread of the epidemic. High store rents and sharp declines in sales have ultimately forced the company to file for bankruptcy protection.
Under the impact of the epidemic, it is not just MUJI's U.S. subsidiary that is affected.
Another Japanese retail brand-Uniqlo's operating income has also been greatly affected. According to the financial report released recently by Uniqlo parent company Japan's Fast Retailing Group, affected by the epidemic, the company's net loss in the third fiscal quarter as of the end of May reached 9.82 billion yen, and Uniqlo's revenue and profit in all major overseas markets dropped significantly.
In fact, since the outbreak, more and more well-known global retail companies have been hit hard. Just a few days ago on July 8, Brooks Brothers, a well-established American apparel brand with more than 200 years of history, also applied for bankruptcy protection in the US court.
According to another report in the Wall Street Journal, US court records in May showed that 722 companies across the United States filed for bankruptcy protection, a 48% increase from the same period last year. There are many well-known companies including Hertz, J. Crew, JCPenney and Neiman Marcus.
At the same time, in order to overcome the crisis as soon as possible, many retail companies such as Topshop, H&M and Zara have also closed their many stores in the world. Data show that in March this year, H&M sales fell 46%, closing 3778 stores. Zara's 2019 annual report also shows that 50% of the group's global stores are temporarily closed.
But it is worth mentioning that when a company files for bankruptcy, it does not necessarily mean that the company will go bankrupt. Many companies will use bankruptcy procedures to get rid of debt and close unprofitable businesses, thereby focusing more on profitable strategies.
In this regard, MUJI CEO Satoshi Okazaki also said that with this "bankruptcy crisis", the company will also plan to refocus on online sales and refocus its work in the United States on key regional markets and e-commerce business. on. (Finish)