Homeplus Co. said it is currently difficult to immediately reassign employees from 37 stores where operations have been temporarily suspended. The company plans to proceed with reassignments once its debtor-in-possession (DIP) emergency operating loan is secured and operations at the remaining 67 stores return to some degree of normal.
Homeplus Co. stated accordingly in a statement on the 12th that, "Because the 67 stores that remain open are also not in a normal state as customers have sharply decreased due to product shortages, it is difficult to immediately reassign staff from the suspended stores."
The Homeplus Co. chapter of the Korean Confederation of Trade Unions (KCTU) Mart Union said earlier that day, "The company withdrew within a day its promised reassignment plan for employees of suspended stores," and "Although it had declared it would reassign those wishing to continue working to other outlets, it abruptly notified us that 'given product delivery conditions, accepting additional personnel is difficult, so we have decided not to implement reassignments.'"
Homeplus Co. explained that the suspension was due to a deterioration in product sourcing after entering rehabilitation proceedings. The company said, "As major partners have tightened delivery terms, it has become difficult to secure enough products to supply all stores."
It added, "With products in short supply, customers have stopped coming to the stores, and sales have dropped by more than 50% from a year earlier. Concentrating a limited volume of products at 67 stores to prevent sales declines and customer attrition at key locations was an unavoidable decision to first normalize operations at least at those 67 stores."
Homeplus Co. said it will pay employees at the 37 suspended stores a furlough allowance equal to 70% of their average wages, while moving to reassign those who wish to work to stores that continue to operate once conditions improve.
Homeplus Co. has temporarily suspended operations for about two months from the 10th until July 3 at 37 of its 104 hypermarkets with lower contribution, and has shifted to a focused operating regime centered on the remaining 67 stores.
Meanwhile, Homeplus Co. also closed early—within a day—the application period for voluntary resignations among employees of Homeplus Express, its supermarket business, after applications surged as soon as intake began. Applications had originally been scheduled to be accepted until the 20th of this month. In addition to statutory severance pay, voluntary resigners will receive compensation based on years of service.