Homeplus, which is undergoing corporate rehabilitation (court management), has decided to close 15 stores that are targeted for closure due to the breakdown of rent negotiations by the end of the year. In addition, the operating hours of 68 stores, which had been open until 11 p.m. or midnight, will also be shortened to 10 p.m.
According to the industry on the 3rd, Homeplus informed employees that it would close five stores on Nov. 16 and the remaining ten stores would close in December.
The five stores closing in November are located in Suwon Woncheong, Daegu Dongchon, Busan Jangrim, Ulsan Buk-gu, and Incheon Gyeyang. The ten stores targeted for closure in December are located in Seoul Siheung, Gayang, Ilsan, Ansan Gojan, Hwaseong Dongtan, Cheonan Sinbang, Daejeon Munhwa, Jeonju Wansan, Busan Gamman, and Ulsan Nam-gu.
Homeplus is in the position that it has no choice but to close stores for successful corporate rehabilitation. This is due to the fact that the annual operating loss of these 15 stores amounts to 80 billion won, making it difficult to bear the rent of about 70 billion won.
Homeplus explained to employees, "The demand for additional funds exceeding 100 billion won, which had not arisen before the rehabilitation, is occurring due to strengthened transaction conditions such as advance payment requests for deposits from major clients and a reduction in the settlement period, leading to a deterioration in liquidity."
It added, "With the demand for funds increasing ahead of Chuseok, the pressure on cash flow is intensifying as rent arrears are being paid for stores where rent adjustments have been completed."
Homeplus also decided to advance the operating hours of all large mart stores to 10 p.m. to reduce operating costs, along with the closure of the 15 stores where rent adjustments have broken down. Previously, these stores had operated until 11 p.m. or midnight.