Japanese homewares and lifestyle retailer Muji has placed its US business in Chapter 11 bankruptcy protection with debts of US$64 million. 

The company said the measure was the result of having to continue to pay rent in high-profile locations while stores were shuttered due to the Covid-19 pandemic. Landlords had shown little flexibility despite stores not being able to trade. 

Under bankruptcy protection, the company’s parent, Ryohin Keikaku, has six months to submit a restructuring plan. 

After launching in 2006, Muji US has opened just 19 stores there. But it chose high-profile locations like 5th Avenue and Times Square to establish brand exposure.

In the year to February, the company achieved sales of $102.5 million, but reported a loss of $16.8 million. 

Muji has no intention of closing or exiting the US. Ryohin Keikaku, president Satoru Matsuzaki, said he would personally oversee the restructure of the US business. 

“The US is the cornerstone in building name recognition,” Matsuzaki was quoted in the Nikkei.

Muji US has reopened 10 stores, but total sales are running at just 20 per cent of the level of pre Covid-19.