Muji Confirms S’pore Outlets Not Affected Despite ‘Zero Income’ During CB Period

Seeing businesses fold in recent months is akin to seeing influencers getting into “sagas”—it’s become almost jaded, and now, we can only pray that our favourite brands would remain in business while we hope that those we hate, like Goody Feed, to go under soon.

When Muji in the US filed for Chapter 11 bankruptcy protection 10 days ago, the chain’s Tokyo-based parent company Ryohin Keikaku has stated that business in other markets will not be affected.

But we’ve heard that from many other businesses before, and eventually, they left us one by one.

Thankfully, Muji has come out to confirm that the Singapore stores can survive because of this guy:

Yay, the Government’s COVID-19 relief measures (not the East together Coast Singapore Plan) have helped them tided over this trying period.

Muji Confirms S’pore Outlets Not Affected Despite ‘Zero Income’ During CB Period

According to CNA, a spokesperson has confirmed that Ah Gong’s money has helped, saying, “We are able to receive rental rebates that could relieve some of our heavier costs temporarily.”

The rental rebates, which isn’t just a “say-say-only-lah” but a law, would waive off four months of rental for Muji outlets (not for their offices or warehouses, which should have 2-month waiver).

Their landlords are not supposed to take rental from them from April 2020 to July 2020, and part of the rebate is paid for by the Government which will provide the funds either through property tax rebate or cash grant.

Ah Gong actually spent $3.8 billion for this scheme so that businesses like Muji can stay afloat.

For some reason, the cash grant is given to the landlords instead of direct to the tenants, so there have been cases of landlords dragging their feet in providing the rebate even when it’s the law.

Muji Singapore also said that the US arm has filed for protection to ensure “future health, growth and viability of the company,” and there’s no plan to submit similar applications in other countries like Singapore and Malaysia.

The spokesperson added, “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.”

How the Circuit Breaker Almost Killed a Beloved Brand

Muji Singapore does not have a standalone online store, and so, according to them, their income during the entire Circuit Breaker period was “zero.”

And to tide them over, they take email orders and sells their products on eCapitamall and Shopee.

eCapitamall is an online store that brands itself as a “curated digital mall featuring the merchandise of retailers, the majority of whom also operate in CapitaLand’s Singapore malls,” but it’s only catered for shops in these malls:

Shopee is…Shopee lah, but it should be noted that the official store for Muji in the ecommerce giant has a whopping 16.1k followers and 9.3k reviews, with an average rating of 4.9 out of 5. Anyone who’s sold anything online would know that having these good numbers is the key to brisk sales.

When Phase One ended and shops were finally reopened, sales increased to about 60% to 70% compared to the same period last year, so they were still not making up for lost sales, and needless to say, there’s no more rental rebate (unless DPM Heng puts on his Cai Shen Ye suit again lah).

Which is why they’re shifting their focus to online sales instead, saying, “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.”

So, what happened over in the US?

Muji in The US

Following the temporary closure of its 18 American stores back in March (due to the pandemic), the retailer is reportedly now trying to shut down some unprofitable stores and renegotiate rents.

It has also expressed a renewed focus on online sales.

“Muji has felt the devastating effects of the Covid-19 pandemic on in-store retail, and as a result will take this opportunity to refocus our efforts in the United States on key regional markets and e-commerce,” Muji CEO Satoshi Okazaki had said.

According to the company, the bankruptcy process will “ensure the future health, growth, and viability of the company. Muji is committed to serving its customers in the market and providing a high quality of product and experience into the future.”

They have filed for Chapter 11 bankruptcy protection, and apparently, the business has liabilities of $50 million to $100 million according to its bankruptcy filing.

For that uninitiated, liabilities mean money to be repaid, which mean debts lah.

To date, Muji in the US currently remains open for business in its recently reopened stores, as well as its online platform.

Muji, which actually stands for Mujirushi Ryohin, is a listed company in the Tokyo Stock Exchange. It has 10 stores in Singapore and 328 stores in Japan. Internationally, it has 505 stores, with most of them in China, South Korea and the US.