Core Viewpoint - MUJI is experiencing a significant contraction in its retail presence in China, with multiple store closures in major cities, attributed to quality disputes, rising competition from local brands, and ongoing price reductions that have failed to restore its former appeal [6][16][52]. Group 1: Store Closures - MUJI has announced the closure of several stores, including the Beijing Shimao Gong San store, which will cease operations on August 31, 2025 [5][7]. - Other locations facing closure include stores in Beijing, Shanghai, Ningbo, Jinan, and Changsha, indicating a broader trend of retreat from key urban markets [10][16]. - The company claims these closures are part of a normal adjustment process to improve operational efficiency in response to declining foot traffic in certain shopping districts [16]. Group 2: Pricing and Quality Issues - MUJI has faced criticism over its pricing strategy, with consumers questioning the high prices of products that are often manufactured in China [21][36]. - Quality concerns have been raised, with customers reporting issues such as product defects and inadequate customer service, which have led to dissatisfaction and negative perceptions of the brand [41][51]. - The company has been penalized multiple times for quality-related issues, highlighting ongoing challenges in maintaining product standards [51]. Group 3: Market Competition - Since 2015, MUJI's same-store sales growth in China has slowed, with negative growth reported in 2018, indicating a loss of market momentum [53]. - The rise of local competitors offering similar styles at lower prices, such as Miniso and NǒME, has intensified competition and eroded MUJI's market share [58]. - Despite recent price adjustments and a focus on localization, MUJI continues to struggle with consumer perceptions regarding its pricing relative to quality [59][60]. Group 4: Financial Performance - MUJI's parent company reported a 19.2% increase in sales to 591.09 billion yen (approximately 28.71 billion RMB) for the nine months ending May 31, 2025, with a 30.1% increase in net profit [56]. - The company has opened 15 new stores in China since March 1, 2023, aiming to maintain a growth trajectory despite the challenges faced [56].