Lovers of gel pens, wooden dishware, and earth-tone linens mourned last week as news of MUJI’s ($PRIVATE:MUJI) bankruptcy spread. The American arm of the cult Japanese minimalist emporium announced Friday that it will undergo “restructuring” that includes a Chapter 11 filing “to ensure the future health, growth and viability of the company.”
MUJI, the Japanese retailer w 18 U.S. locations (including one below the NYT office), filed for bankruptcy in the U.S. The restructuring won’t affect the company’s much bigger international operations. pic.twitter.com/J0VbKvINl4— Sapna Maheshwari (@sapna) July 10, 2020
There’s no reason to cry, or rush-order a box of 0.7 mm seafoam ballpoints. The filing mostly appears to be a streamlining strategy to help the company rebalance itself. MUJI anticipates the “closure of a small number of its brick-and-mortar stores,” but its online store and most of its 19 US locations will remain operational. The majority of the company’s operations, which are in more quickly recovering areas like Europe and Asia (specifically, China, Japan and Taiwan), won’t be affected by the bankruptcy.
Still, MUJI’s rocky few months in the US raise a question. Far from going under, why aren’t home goods and lifestyle retailers like MUJI getting filthy rich during America’s house arrest? MUJI specializes in making your apartment sleeker, your desk neater, your kitchen more efficient, your bed softer and your wardrobe more comfortable. As people scrabble together home offices, learn how to cook and retire their denim, MUJI’s well-priced inventory of beanbag chairs, silicone spatulas, organic towels, linen slippers and elastic-waist “easy pants” seems divinely suited to quarantine shopping. The brand has been pushing its lockdown-friendly goods on Instagram and its website even has a new section called “Work From Home,” featuring 6-color pen sets and modular desk storage units.
MUJI isn’t the only company defying this logic. Despite the explosion of interest in home cooking, on Wednesday, upscale cookware brand Sur La Table declared bankruptcy and announced it will liquidate nearly half its 120 stores (it was hard-hit by the pause on their popular, pricey in-store cooking classes). Earlier in the week, Bed Bath and Beyond said it would permanently close 200 locations over the next two years. Back in May, purveyors of tiki torches and lava lamps, Pier 1 Imports announced they’d close for good after they failed to find a buyer, and the pandemic crushed hopes of recovery from their February bankruptcy. JCPenny, another player in home goods, is also in bankruptcy and closing stores.
Then again, why would home goods be the exception to the retail apocalypse? Nearly half the nation is out of work and millions have lost their health insurance. Americans are saving money, spending on essentials and holding off on big purchases, like a new couch or blender.
There is evidence that home goods are seeing a modest boost, even if it’s not reflected by the recent bankruptcies. According to TD Ameritrade’s recent study on where American’s are spending more during quarantine, furniture and decor shopping is reportedly up 12% (next to a 57% boost on groceries, 53% on cleaning products and 32% on streaming services.)
This checks out: not all home goods retailers are struggling. It’s actually a great time to sell dutch ovens and throw rugs if your online shop was in order before the pandemic, and your business model doesn’t include fleets of stores in high-rent ZIP codes. Wayfair, the online marketplace that’s been called the ”Amazon of home goods” has seen its stock skyrocket since the pandemic, with shares hitting a record high last week (despite being the subject of a human trafficking conspiracy theory). Amazon itself now sells cheaper, generic versions of many of the decor and kitchen products these struggling companies made their name on. CNBC notes that Williams-Sonoma, owner of Pottery Barn and West Elm, was already doing more than half its sales online before the pandemic. Its slick website and loyal online shopping base has helped them weather the storm, and driven their stock up 75% since 2018.
The success of online-only, or online-friendly retailers emphasizes why brands structured around IRL pleasure shopping are taking a beating. For MUJI, its desirable stores might even be part of the problem. Beloved for their soothing ambiance, MUJI stores are where people go to camp out by the diffusers, doodle in the stationary section and maybe impulse buy a notebook in between work and happy hour. Consumers didn’t know them as online brand, and their slow, clunky website certainly doesn’t recreate the relaxing effect of their stores.
Let's be honest, I think MUJI needs good web dev who can fix their online store and shipping infra at cheap rent place .— Mariko Kosaka (@kosamari) July 10, 2020
It was, very clearly, not prepared for the online shopping demand surge. (remember that year MUJI online store was "under construction" forever?)
Whatever windfall the home goods world is seeing, it’s only being enjoyed by the most online-savvy players. For most Americans, few of MUJI or Sur La Table’s products — like a $3,000 coffee maker or a mattress with legs — feel essential right now, especially if you don’t get to browse the shelves or sniff the candle section.
Muji is where I would duck into when I was stressed at my old Midtown job and kick it on a bean bag inhaling essential oils til my lunch break was over— what's not clicking? (@Muna_Mire) July 10, 2020
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.