Japanese retailer Muji eyes up pre-pack administration deal to keep UK stores open
Japanese retailer Muji is lining up a deal to sell itself out of administration in a bid to keep its UK stores open.
The company has announced its intention to appoint administrators in a move which the business said is “part of a planned strategic restructuring”.
Muji added that its management expects a deal to be completed “shortly”.
Muji’s has five stores in London – Carnaby Street, Covent Garden, Islington, Kensington, Oxford Street and Tottenham Court Road – as well as one in Birmingham.
In Europe, it has stores in Finland, France, Italy, Germany, Spain, Portugal, Switzerland and Denmark. It also has franchise stores in Ireland and Poland.
A Muji statement 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 accounts for Muji Europe Holdings for the year to August 31, 2022, were supposed to be filed with Companies House by the end of August 2023 but have not been done so.
No accounts for its year to the end of August 2023 have been filed either.
Muji is ultimately owned by Ryohin Keikaku Co which trades on the Tokyo Stock Exchange.
Reacting to the news 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.”