A Homeplus store in Seoul. [Herald DB]
A Homeplus store in Seoul. [Herald DB]

Homeplus, facing the threat of bankruptcy, said Monday it had submitted a revised rehabilitation plan to the Seoul Rehabilitation Court.

The company filed an updated version of its existing rehabilitation plan incorporating business improvements achieved through its self-rescue efforts. Costs have fallen by approximately 1.2 trillion won ($777 million) compared with levels just before the company filed for rehabilitation. Homeplus said its hypermarket operations could generate operating profit in the 80 billion won range once product supply and store operations are fully normalized, and projected that figure could grow to 150 billion won within three years.

Homeplus entered rehabilitation proceedings on March 4 last year and has since restructured its network from 126 hypermarkets down to 67 core stores. The company renegotiated rents with landlords and sold its supermarket unit Homeplus Express to NS Shopping, an affiliate of Harim Group, simplifying its business structure. It also cut its workforce by roughly 50 percent through natural attrition and voluntary redundancies to improve operational efficiency.

"As already demonstrated through the sale of the supermarket business, a recovery in sales is entirely achievable once product supply is normalized," Homeplus said. The company plans to fully repay both public-interest claims and rehabilitation claims using profits from its return to profitability and proceeds from real estate sales at closed stores. Homeplus added that it would pursue mergers and acquisitions concurrently, building on its improved earnings structure.


korean@heraldcorp.com