MUJI, a Japanese retailer that sells simplistic home items, including apparel, stationary, furniture and cosmetics, filed for Chapter 11 bankruptcy early last month. According to its published announcement, MUJI USA “made the decision to restructure its business,” presumably closing select locations and focusing on e-commerce.
The message didn’t come as much of a surprise, especially considering the current state of affairs. According to The New York Times, Americans’ shopping expenses have dropped more than 50% since the beginning of this year. Decreased spending combined with stay-at-home mandates that forced businesses to close their doors made this decision inevitable, especially since many retailers continue to pay rent.
On July 31, MUJI released another statement, this time disclosing that as part of its bankruptcy proceedings, it made the decision to “close our California retail locations indefinitely.” Up until this point, MUJI USA had seven locations in California.
The announcement comes as a disappointment for students who frequented the stores. Many young adults knew MUJI for its extensive collection of high-quality pens and office supplies, something that defined the brand and gave them considerable influence over the stationary community. Having first entered the American market in 2007, however, MUJI might not be well-known to the rest of the general public. The company is extremely similar to IKEA, but instead of focusing solely on furniture, they offer apparel and stationary too. In some locations, MUJI even operates a restaurant, much like that of IKEA’s food court.
MUJI’s closure of its California locations is largely due to COVID-19, but it also reflects a larger, seemingly involuntary shift toward online shopping in the retail industry. Yet, this move might not bode particularly well for MUJI, whose mission to offer “simple, low-cost, good quality products” has relied heavily on the layout of its brick and mortar shops.
With scented diffusers, plain wood furnishings and neat organization, browsing through the store was an experience in itself. For many, this unique design has drawn customers back to MUJI, because looking through the store was often just as rewarding as purchasing the items. The comfortable, clean aesthetic upon which MUJI has established its brand seems inseparable from its shops.
Additionally, MUJI’s mission of creating simple, “rational” products goes beyond interior design and down to the very product packaging itself. The company designs items without overbearing logos, and they streamline this process so much that product stickers and instruction manuals are oftentimes in Japanese. Whether the items are sold in the United States or another part of the world, standardization is MUJI’s norm. A price tag sticker is the only differentiator between a pen sold in Japan and a pen sold in the United States. Fortunately, the simplicity of the company’s items usually means that instruction guides aren’t even necessary, and the lack of extraneous packaging also fits into the company’s emphasis on “resource-saving” and “sustainability.”
Prior to the closure of its physical locations, MUJI’s simplicity never came at the expense of customer satisfaction; for example, after purchasing a notebook, you could customize it with the stamp table that was inside each store. MUJI’s interior resembled that of a hardware store at times, with the ability to buy items not in bulk, but one by one. Items like clocks, flashlights and various cosmetics always had samples for testing. This methodical way of shopping further reflected MUJI’s emphasis on “rational satisfaction.”
Such details are impossible to recreate on the internet. Toru Tsunoda, the man responsible for overseeing MUJI’s entry into the American market, said that “There are things we just can’t replicate for you online — the aroma diffusers, food-tasting sessions or the pen-and-pad testing area.” And even if other MUJI stores are continuing operations, the pandemic has forced them to expand their online presence regardless, which brings some uncertainty as to what extent the MUJI experience can be replicated digitally, if at all.
At the same time, MUJI’s reputation as a quality, no-brand company suggests that this restructuring might not pose as many problems as it might for other fashion retailers. Thus far, MUJI has fared quite successfully with its company mission that goes against everything that American consumerism stands for, and transitioning online might be less of a hurdle. Tsunoda continues by explaining that “It doesn’t matter if someone only buys a pen when they visit; if they use that pen and it works for them, they’ll come back and try our other products.” The consistency of MUJI’s items could encourage existing customers to continue to bring their patronage there, whether online or in-store. Tsunoda said that “They’ll bring in others with them” as well.
However, it’s obvious that closing stores will decrease MUJI’s exposure to a large portion of first-time shoppers. With locations in many prominent cities, many stumble upon MUJI by accident. That’s certainly what happened to me when I visited one of the locations in China a few years ago.
Ginza, Tokyo’s most luxurious shopping district, hosts the company’s global flagship location with more than seven stories. Locations in California included Hollywood Boulevard, Santa Monica’s Third Street Promenade, San Francisco’s SoMa and others — all of which were practically guaranteed to attract more people than regular malls due to their prime location.
According to Nikkei Asian Review, the world’s largest financial newspaper, “The outlets are located in prime locations like New York’s Times Square and 5th Avenue — places that come with exorbitant rent. Taking on the lopsided lease payments was considered a strategic decision in terms of expanding globally.” Unfortunately, recent decreases in consumer spending have made MUJI’s California locations untenable for the foreseeable future.
MUJI will continue to operate its 12 other locations in the country in the meantime, and all its stores outside the United States are running uninterrupted too. In fact, MUJI plans to expand its current network of 970 stores to 1,138 stores by August 2021.
The entire retail industry in the United States has been steadily transitioning from brick and mortar stores to e-commerce, and the pandemic has only exacerbated this process. For niche brands, like MUJI, and even prominent ones, like H&M, Zara and GAP, the decision to close stores is necessary to keep operating expenses in line.
MUJI’s move to diversify its brand into restaurants and even hotels is a smart move to make itself resistant to the shift toward online shopping, but not everything is immune. One thing MUJI can count on is its unique mission, and it’s something that seems likely to make MUJI here to stay.