With the Seoul Bankruptcy Court approving Homeplus Co.'s rehabilitation plan on the 2nd, Homeplus Co. escaped a liquidation crisis after a year and six months. But in the meantime, its store count has been cut in half, and its workforce has been reduced by more than half. Stores that have reopened are still far from a normal track. The retail industry says "it cleared the legal hurdle, but nothing about Homeplus Co.'s situation has changed," adding that the key will ultimately be to find a new owner.
◇ Stores 124→67, employees 20,000→9,400
The Homeplus Co. General Labor Union said in a statement the same day that the number of stores fell to 67 from 124 before the rehabilitation filing, and the number of executives and employees decreased to about 9,400 from more than 20,000. That is about half the size of E-MART (133) and Lotte Mart (112), dropping it to No. 3 among big-box chains.
Court-appointed administrator Kim Gwang-il said at the stakeholders' meeting the same day, "We cut more than 20 billion won a month in rent and more than 26 billion won a month in labor costs." It is true that shedding loss-making stores reduced fixed costs, but the sales base disappeared to that extent as well. Homeplus Co. set a goal of normalizing operations at 67 stores by 2030 to post 4.3 trillion won in annual revenue and 162.8 billion won in operating profit.
The union said the approval "was not an outcome handed to us." After a restructuring plan fell through in Dec. last year and a 300 billion won DIP (new money for a company under rehabilitation) collapsed in Mar. this year, union members decided in May to forgo and defer wages. Then, just before the rehabilitation was set to be terminated in Jul., they went directly to Meritz Financial and secured 200 billion won in DIP support.
The question is whether the reopened stores can get back on a normal operating track. A retail industry official said, "Customers go to a mart to buy what they need, but there were stores where items like back scratchers or dishes were placed in refrigerated cases where meat should be," adding, "It seems it was 'a reopening for the sake of reopening.'" Although materials show sales have increased from a year earlier after reopening, some say the atmosphere differs widely by store.
The online business, the battleground, is still in its infancy. Last year, online accounted for 59% of sales at retailers, a record high, while big-box stores' share fell below 10% for the first time, to 9.8%.
◇ "Prime stores already sold"… finding a new owner is key
Industry watchers broadly agree that the task is to find a new owner. Homeplus Co. plans to sell 19 owned properties among the 54 closed stores by Feb. 2028 to repay creditors and then pursue its own mergers and acquisitions (M&A). But before approval, during the M&A process, it distributed investment memorandums to more than 10 domestic and overseas retail corporations, and none expressed interest in acquiring. Only Homeplus Express, the supermarket division, was sold to NS Home Shopping under Harim Group.
Lee Jong-woo, a professor in the Department of Distribution and Marketing at Namseoul University, said, "Just because the rehabilitation plan was approved does not mean Homeplus Co.'s situation has changed. It still needs to find a new owner through a sale," adding, "It is not easy to sell the whole company now that most of the prime stores have already been disposed of." Lee said, "The only realistic option is to peel off and sell some stores that do not overlap in trade areas with E-MART or Lotte Mart," adding, "With the big-box sector in a slump, the odds do not look high that it will be sold to a player in a different, non-retail line of business."
The industry believes the government clearly wants to keep Homeplus Co. going. It sounded out acquisitions of a social-contribution nature with large platforms, NongHyup, and financial holding companies, but most reportedly balked, citing the difficulty of persuading shareholders.
Because of this, some expect continued pressure, for the time being, on MBK Partners, the largest shareholder, to inject additional capital. Next month's National Assembly audit is another variable. The union on the day called for identifying the responsibility for poor management by MBK and Chairman Kim Byung-ju and the current leadership, finalizing a timetable for the return of employees on leave, early repayment of public-interest claims to small suppliers and tenant vendors, and disclosure of a transparent M&A process. It also urged quick proof of business activation plans such as the "Trader Joe's" model pledged by President Cho Joo-yeon.