SINGAPORE: Japanese home-goods chain Muji said that its business in Singapore and Malaysia “will be as usual” despite the United States arm filing for bankruptcy protection.
A spokeswoman for Muji Singapore said that while the US business suffered “continuous losses” due to factors such as high rents that were a “bottleneck in terms of profitability”, the Singapore operations were helped by the Government’s COVID-19 relief measures.
Singapore has released four Budget packages aimed at mitigating the impact of COVID-19 on the economy and helping businesses and workers. The Government will spend a total of S$93 billion on these measures.
“We are able to receive rental rebates that could relieve some of our heavier costs temporarily,” the spokeswoman said.
Japanese owner Ryohin Keikaku announced on Jul 10 that Muji’s US unit had filed for bankruptcy protection. The US unit would close unprofitable stores and renegotiate rents in the US, where its 18 stores have been closed since mid-March due to the pandemic, Ryohin Keikaku said then.
The Singapore spokesperson said Ryohin Keikaku voluntarily filed for protection for the US arm to ensure “future health, growth and viability of the company”.
Ryohin Keikaku does not plan to submit similar applications in other countries, the spokeswoman said.
“We would like to assure all of our corporate and media partners that the business operations in Muji Singapore and Muji Malaysia will be as usual,” the spokesperson said.
Muji operates 10 stores in Singapore.
The Singapore business was affected by the COVID-19 pandemic and the “circuit breaker” measures put in place to curb the spread of the outbreak, said the spokeswoman.
As the firm could not operate its stores during the circuit breaker period “our income, needless to say, was zero”, she said.
“Our stores lost two months of sales due to circuit breaker measures,” she said.
During the almost two-month long period, Muji took email orders and now also sells its wares on eCapitamall and Shopee.
After stores reopened in Phase 2 of Singapore’s post-circuit breaker period, sales increased to about 60 to 70 per cent compared to the same period last year, she added.
“We believe shopping online will be the new normal after COVID-19. In our longer term plan we will launch our own e-commerce platform. Cost-cutting measures are also closely monitored to ensure long-term viability of our business,” she said.