Muji Europe Holdings - Case Update

Muji Europe Holdings (“MEH”), the European arm of Japanese household and consumer retailer Muji, has been acquired out of administration by a connected entity via a pre-pack sale.

Muji was established by its parent Ryohin Keikaku Co., Ltd (Japan) (“RKJ”) in 1980 as an exclusive brand in Japan. The first Muji store outside of Japan was opened in 1991 in London.

MEH was established in 2007 by way of a joint partnership between RKJ (66%) and Mitsubishi Corporation (34%). Prior to the administration, MEH acted as a holding company, operating 32 retail stores and e-commerce channels through 10 fully-owned operating subsidiaries across Europe.

The company was financed by way of shareholder loans from RKJ and Mitsubishi. During 2020, the company significantly increased its borrowings from shareholders by €26.4 million due to the negative impact on trading of the Covid lockdowns. MEH had insufficient liquidity to make the first repayment in September 2023 and missed subsequent repayments in January and March 2024.

Alexander Williams and Simon Edel of EY were appointed joint administrators of MEH on 8 April, and completed a sale of MEH’s business and certain assets to Muji Europe, a wholly-owned subsidiary of RKJ. The sale consideration was approximately £18.4 million, comprised of £10.4 million on account of the cash held in the MEH’s subsidiaries (purchased on a pound for pound basis) and £8 million in respect of the business and assets. All of the MEH’s employees transferred to Muji Europe on completion.

The joint administrators have been assisted by Simmons & Simmons (legal). Their proposals can be found HERE.