MINISO Has Filed An Application For Bankruptcy
UPDATE: MINISO Canada has responded to bankruptcy claims. See the response.
In the height of Canada’s love for Japanese and Japanese-style retailers, it seems like not all retailers are performing as well as they seem to be.
Retail-Insider recently broke news that MINISO Canada’s parent company MINISO International Hong Kong Ltd. and MINISO International (Guangzhou) Co. Ltd. have filed an Application for Bankruptcy Order in the Supreme Court of British Columbia.
A hearing is proposed to be held in the early new year in Vancouver.
According to the application obtained by Retail-Insider, if MINISO Canada doesn’t reply or show up to the hearing, its Chinese parent company can apply for an order of bankruptcy and collect on debts.
MINISO Canada allegedly owes $2.4 million USD to its parent company, as well as a little under $18 million CAD in inventory.
The same application states that demands for repayment were made repeatedly, however, MINISO Canada allegedly ignored them.
The Application For Bankruptcy Order goes through some interesting details, including many things that go against the terms of the Licensee Agreement, like the transfer of intellectual property rights, and the continued use of the MINISO trademark in Canada, which was terminated some time ago. The parent company claims that MINISO Canada has been “fraudulent in its business dealings by transferring and hiding assets.”
A source close to Retail-Insider told them that the move could also be tied to the recent detainment of Huawei’s CFO Meng Whanzhou.
Some are saying that the two controversies could be connected. There is some speculation that China is trying to retaliate against the recent detainment, and hitting the Canadian retail landscape is one way to do it.
With all that being said, as Retail-Insider notes, there has been a “pattern of unethical behaviour” with MINISO Canada since their launch, so while it’s possible that the Application for Bankruptcy Order is related, there’s a good chance it’s not.
All of the news is fairly surprising considering MINISO’s vow to open 500 stores across Canada. It’s been majorly popular, with many dubbing it one of Dollarama’s top competitors. The retailer’s success can be attributed to its low price range — which is between $1 and $6 — and it’s interesting selection of goods.
However, considering how much money is owed to their parent company, MINISO may have expanded too fast.
Things are looking pretty good for their new competitor Oomomo right now…
Currently, the story is still fresh, so there’s no word on the future of MINISO in Canada and whether or not they will be staying open. All we can do is wait until the hearing in January. We’ll keep you updated as this story progresses.
Featured image: Instagram/@joannachiu