Company moves to liquidate owned properties among shuttered stores; workers at closed locations face voluntary or forced redundancy
Homeplus is considering selling 19 company-owned stores it has closed, as the cash-strapped hypermarket chain seeks additional ways to liquidate assets and repay mounting public-interest and rehabilitation claims. The company has also formally decided to permanently close all 37 stores it had placed under temporary suspension.
Homeplus is reviewing a plan to bring the 19 owned stores to market this year. Most of the properties slated for sale are among the 37 stores that were placed under temporary suspension between May 10 and July 3. The company recently notified its union of its decision to permanently close all 37 locations.
The plan is outlined in a revised rehabilitation proposal Homeplus drew up ahead of the July 3 deadline for creditors to approve a restructuring plan. The company shared the revised proposal with its creditor council at the end of last month. The document contains multiple rehabilitation scenarios, each contingent on the court granting additional deadline extensions.
Homeplus has already put its supermarket unit, Homeplus Express — sold to NS Home Shopping, an affiliate of Harim Group — on the market, and has now also listed its headquarters, online operations and hypermarket division for merger and acquisition. Samil PricewaterhouseCoopers is managing the sale process and has sent official teasers to potential buyers, including major domestic retail conglomerates. Homeplus is prioritizing a plan to complete the sale of its remaining business units by September and use the combined proceeds — including revenue from the owned-store sales — to repay creditors.
If a sale falls through or is delayed, however, the company is also considering restructuring its 67 currently operating stores around groceries and leasing the freed-up floor space to outside retailers. The revised rehabilitation proposal also includes a plan for debt repayment in 10-year installments.
As Homeplus's fiscal difficulties deepen, fears of mass closures have become reality. On Thursday, the company sent official notices to the Homeplus branch of the Mart Industry Labor Union and a general union, stating it had decided to permanently close the 37 stores "currently on suspension with low contribution levels" and that it intended to apply an asset-liquidation store support regime to employees at those locations. The notices also announced a voluntary redundancy program for staff at the affected stores at the level of "manager or above," excluding employees with less than six months remaining before mandatory retirement.
This marks the first time Homeplus has officially acknowledged both the permanent closures and the voluntary redundancy push at the 37 suspended stores. Approximately 3,500 workers are employed across those locations.
Homeplus added a caveat, saying the asset-liquidation support regime and voluntary redundancy program "can only be applied if creditors agree to an emergency operating loan and an extension of the rehabilitation proceedings." Without additional lending from creditors and court approval, workers could effectively be forced out through compulsory redundancy with no financial support.
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