Muji parent posts new profit record
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Muji parent Ryohin Keikaku has revealed another record quarter in both sales and operating profit.
In the three months to May, Muji achieved group-wide sales of 106.5 billion yen (US$963.5 million), up 9.7 per cent year on year. Its net profit reached 9.5 billion yen, its best quarterly result ever.
Citing strong sales in its Japan home market, and the broader Asia-Pacific region, Muji’s president Satoru Matsuzaki said the company expects even better results to come from overseas markets in the future.
With profit in Japan, where the population is declining, up a modest 1 per cent, its East Asian surplus soared 36 per cent during the quarter.
Looking forward, Muji expects strong growth in China. Sales there accounted for 17 per cent of the group’s sales during the quarter, making it the second-largest market for the brand behind Japan, with 65 per cent.
Muji will start designing products in China for Chinese, after some previous missteps with items created in Japan. Matsuzaki cited water bottles as an example, which Chinese consumers shunned because they were too small.
“We want to sell appropriate products to match China,” he said.
Muji this week revealed plans to open an office in Switzerland which will become the headquarters for its struggling European business. Despite a loss of 273 million yen in Europe and North America during the quarter, the company is confident it can turn the business around and is planning more stores in both regions.
Questions & Answers
Q.Which markets contributed most significantly to Muji's record quarterly sales growth?
Which markets contributed most significantly to Muji's record quarterly sales growth?
Strong sales in Japan and the broader Asia-Pacific region drove the company's performance. Specifically, East Asian profit soared by 36 per cent during the quarter, while Japan's profit rose a modest 1 per cent.
Q.What is Muji's strategy for improving its sales performance in China?
What is Muji's strategy for improving its sales performance in China?
Muji plans to start designing products in China specifically for Chinese consumers. This change comes after previous issues with Japanese-designed items that did not suit the local market, such as water bottles that were too small.
Q.How did Muji's European and North American operations perform this quarter, and what are the plans for these regions?
How did Muji's European and North American operations perform this quarter, and what are the plans for these regions?
Muji's European and North American business recorded a loss of 273 million yen during the quarter. Despite this, the company plans to open more stores in both regions and establish a new office in Switzerland as its European headquarters, aiming to turn the business around.
Q.What proportion of Muji's group sales are currently generated by its Chinese market?
What proportion of Muji's group sales are currently generated by its Chinese market?
Sales in China accounted for 17 per cent of the group's total sales during the quarter. This makes China Muji's second-largest market, with Japan being the largest at 65 per cent of group sales.
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