Ryohin Keikaku Co., the operator of the Muji-brand goods store chain, said Friday its U.S. unit filed for bankruptcy protection after the coronavirus pandemic caused store closures and hit sales hard.
Total liabilities left by the subsidiary Muji U.S.A. Ltd. were $64 million, the Tokyo-based company said.
The Japanese retailer, which entered the U.S. market in 2006, said the subsidiary suspended operations at all of its 18 outlets across the United States in March due to the outbreak.
The subsidiary is considering closing some unprofitable stores but plans to continue business in the United States while proceeding with restructuring efforts, the parent said.
It also said the filing for Chapter 11 bankruptcy protection by the subsidiary will not affect the bottom line of Ryohin Keikaku, which has already written down the value of its shareholdings in the U.S. arm to zero.
Also Friday, Ryohin Keikaku reported a group net loss of 4.12 billion yen ($38.6 million) for the first quarter through May, a turnaround from the 6.59 billion yen in profit a year earlier. Sales dropped 29.9 percent to 78.75 billion yen.
The company recently changed its settlement period from the end of February to the end of August. Still in transition, its current fiscal period ends in six months.
© Kyodo News International, Inc., source Newswire