Upscale retailer SSI Group has signed a new joint venture deal with Ryohin Keikaku Co. of Japan (RKJ) to expand the Muji retail business in the Philippines.
Tantoco family-led SSI Group disclosed to the Philippine Stock Exchange on Friday that its wholly-owned subsidiary Stores Specialists Inc. had entered into an agreement with RKJ to create a joint venture company “to further develop the Muji retail business in the Philippines.”
Stores Specialists will have a 51-percent stake in the joint venture while RKJ will own the remaining 49 percent. The local group has committed to invest P89.25 million to jump-start the venture while RKJ will pump in P85.75 million.
The venture, which will own and operate Muji stores in the Philippines, is expected to commence operations on April 1 this year. It will be named Muji Philippines Corp.
“The joint venture with RKJ is expected to strengthen the Muji brand in the Philippines and enable cost efficiencies,” the disclosure added.
Any profit from the venture will be distributed on a pro-rata basis to the partners.
Stores Specialists will provide the joint venture company with operational knowledge and apparel and retail sales expertise specific to the Philippines, while RKJ will provide brand management expertise and retail experience specific to the Muji brand, the disclosure also read.
The deal will still be contingent upon the Board of Investments’ approval of RKJ’s certificate of pre-qualification as a foreign retailer.
The creation of a separate venture firm to handle the Muji brand is seen to give the new unit greater focus and leeway to expand operations.
Originally founded in Japan in 1980, Muji offers a wide variety of good quality products including household goods, apparel and food. Mujirushi Ryohin or Muji in Japanese translates to “no-brand quality goods.” —DORIS DUMLAO-ABADILLA