Yahoo Finance Muji files for administration in latest retail insolvency
The European arm of Japense retailer Muji has filed for administration, in the latest high-street business insolvency.
The shops will remain open, and a pre-pack deal is expected which would save the business. Muji has six stores in London. It is known for its minimalist Japanese designs, for both clothes and home goods.
The news was first reported by TheBusinessDesk.com.
The collapse comes soon after Ted Baker and The Body Shop’s own insolvency filings, as the British high street struggles with low consumer confidence, high business rates and the impact of interest rate rises.
A spokesperson said: “MUJI Europe Holdings (MEH), has announced its intention to appoint administrators. This is part of a planned strategic restructuring of the business and Muji’s management expect to conclude a deal shortly.
“For Muji’s colleagues and customers in Europe it is business as usual – all stores and e-commerce will continue to operate as before, and all new and outstanding orders will be fulfilled.”
The shop has launched a sale this week, in what it is calling “Muji Week”, with 20% off everything in an effort to bring cash in more quickly while it works through the restructuring.
Commenting on the latest developments at Muji, Julie Palmer, partner at Begbies Traynor, said: “Reports that Muji’s European holding company intends to appoint administrators is a reminder of the relentless financial strain bearing down on the retail sector.
“Despite the aim to keep UK stores operational via an expected pre-pack administration, the need to restructure through an insolvency process underscores the severity of the challenges retailers are facing amid a confluence of persistent economic headwinds, dwindling consumer discretionary spending, high interest rates and supply chain disruptions.
“Coming in the wake of The Body Shop and Ted Baker’s administrations, Muji’s restructuring signal that even the best known brands are not immune to the current retail malaise.
“The restructuring of Muji serves as a cautionary tale for the wider retail industry, which was recently identified as one of the top sectors for critical distress by Begbies’ 'Red Flag' research, with over 3,000 retailers facing this higher level of financial distress. Unless the economic climate sees a significant upturn, we may see more high-profile casualties succumbing to the pressures of the cost-of-living crisis.”
According to the Companies House, Muji’s UK accounts are more than six months over due. Its most recent published accounts - covering the Covid-hit year to August 2021 - it made a £15 million loss.
Outside of the UK, Muji has stores in Finland, France, Italy, Germany, Spain, Portugal, Switzerland and Denmark, as well as franchised stores in Ireland and Poland.
