Matsui’s rebuild of MUJI and handing all apparel design to Yohji Yamamoto (2001)

Toward a company that earns on the finish of its products, not on being cheap

The heart of this rebuild lies less in plugging the financial hole than in swapping out the premise of how the company made money. MUJI had widened its following under the banner of “lower, for a reason,” but in an age of collapsing prices that cheapness had become hard to defend. Soon after taking office, Tadamitsu Matsui wrote off the unsold stock and closed the books on the old expansion, then steered back toward products chosen for their finish even at a higher price. Forced to choose between defending cheapness and earning on the merchandise, this can be read as the decision to take the latter.

That said, raising the price band and outsourcing design wholesale to an outside name was also a gamble that risked losing the very customers who had believed in the cheapness. Even so, apparel turned in 2003 into the showcase of the recovery, and became the foundation that later supported the directly-run expansion across East Asia and the record profit of the year ended February 2018. Rather than chasing size or the appearance of margin, at what level of finish should a company sell its own goods — MUJI’s rebuild is instructive precisely for putting that question at the centre of management in the middle of a crisis.