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Japan's MUJI apparel company reduces production bases in mainland China
Business News Agency, September 14th – With the service sector in Japan continuing to show weak demand, Ryohin Keikaku, the company behind Muji, has announced a major restructuring of its manufacturing operations in China. As part of its cost-cutting strategy, the firm plans to cut its 240 contracted production facilities in China by nearly half over the next two years, aiming to significantly reduce labor expenses.
The decision comes as the company reported a sharp decline in profits during the first quarter of the year, with net income dropping by 26% to $321,000. The financial downturn also affected its stock performance, which fell by 2.8% in response to the news. Analysts suggest that the move reflects broader challenges faced by Japanese firms as they navigate an uncertain economic environment.
Japan’s high unemployment rate and shrinking household spending power indicate that consumer confidence remains low, despite some signs of economic recovery. Retail sales continue to underperform, signaling that businesses are still struggling to regain momentum. This shift in consumer behavior is pushing companies like Ryohin Keikaku to reevaluate their global strategies, especially in markets where operational costs are rising.
As the company looks to streamline its operations, the focus will likely remain on efficiency and long-term sustainability, rather than short-term gains. The changes in China could mark a turning point for Muji's international supply chain, potentially reshaping how it approaches manufacturing and distribution in the future.