Classic Retail Failure: Muji USA
Based on this classic retail failure ( Muji USA
Date: July 2020
Category/Product(s): Stationery & retail
Summary: Japanese retailer Muji’s US arm filed for bankruptcy in July, one of the latest victims of the Covid-19 pandemic. Known for its minimalist, unbranded goods, the retailer plans to close some of its 18 US-based locations but will continue to run its e-commerce store. Its US business has reportedly been operating at a loss for the past 3 years, due to high rents and cheaper alternatives.) in 200 - 300 words, please describe the case and answer the following questions or guidelines. You will need outside sources (cite properly) to complete your work:
1. What was the problem or what were the causes of success in the case you picked?
a.Separate the symptoms from the causes!
Classic Retail Failure: Muji USA
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Classic Retail Failure: Muji USA
The classic retail failures of Muji USA were caused by underlying problems that advanced its bankruptcy. The brand was known for its minimalist unbranded products but the USA stores faced challenges that led to its failure.
Causes
The main cause of the business failure was the COVID-19 pandemic which contributed to the 19 stores based in the US being dormant. However, before the pandemic, the retailer was struggling due to high rent rates in prime areas of New York Times Square and Fifth Avenue where negotiations had failed to reach amicable solutions leading to the business reporting losses and inability to expand (Kurimoto, 2020). The problem causes led to the following symptoms.