Homeplus misses Chuseok sales boom as supply woes drag on

Estimated card payments in second week of September fell 60% from prior month

Chuseok gift pre-order cancellation hits peak-season sales

Workers, management call for revenue recovery plan

Sale process for hypermarket unit and closed stores restarts

Homeplus, which is undergoing court receivership, failed to capitalize on the Chuseok shopping season, hampered by product supply problems stemming from a liquidity crunch. With its sale process back on track, restoring core competitiveness through operational improvements has emerged as the central challenge.

According to MobileIndex, a platform operated by big data firm IGAWorks, Homeplus' estimated credit and debit card payments for the second week of September (Sept. 7–13) totaled 13.87 billion won ($10.1 million). That was roughly 60 percent lower than the 34.93 billion won recorded in the second week of August (Aug. 10–16), which included Aug. 13 — the day Homeplus resumed operations following Seoul Bankruptcy Court's approval of its rehabilitation plan. Estimated payments came to 19.52 billion won in the third week of August (Aug. 17–23) and 21.95 billion won in the fourth week (Aug. 24–30). The first week of September (Aug. 31–Sept. 6) stood at 17.30 billion won.

Estimated card payments exclude cash, gift vouchers, simple payment services and in-app purchases, so they differ from actual sales figures, but they do reflect overall trends. According to Homeplus, total sales in August after the resumption of operations reached 116.4 billion won. At a meeting between Homeplus headquarters and its two major unions on Tuesday, participants shared the view that recent sales performance had fallen short of expectations.

The biggest obstacle has been product supply. With payments to suppliers not flowing smoothly, maintaining a full product lineup has proved difficult. Homeplus was the only one of the three major hypermarket chains not to offer advance reservations for Chuseok gift sets — a key sales driver when businesses and consumers place bulk orders ahead of the holiday. E-mart and Lotte Mart launched their pre-order sales on Aug. 6, earlier than in previous years. In the first week of September, when demand peaks, estimated card payments at E-mart and Lotte Mart came to 311.58 billion won and 106.51 billion won, respectively.

At the earlier meeting, calls were raised for management to draw up a concrete plan to boost sales. A string of large-scale discount events Homeplus has held in recent weeks is also seen as part of that effort. Since resuming operations, Homeplus has held five rounds of its "Homeplus is Back" promotional campaign. A second discount event ahead of Chuseok kicked off Thursday.

Recovering competitiveness is closely tied to the outcome of the restarted sale process. Samil PwC, the firm overseeing the Homeplus sale, plans to send teaser letters to prospective domestic and overseas buyers as early as this week. A teaser letter is a document prepared in the early stages of a merger and acquisition process that summarizes key information about the seller, including financial statements. Domestic conglomerates and foreign strategic investors are said to be among the candidates.

The assets up for sale are Homeplus' hypermarket business and its real estate holdings. The hypermarket division — comprising 67 core stores — will be sold through a business transfer. Samil PwC has estimated the liquidation value of the 67-store hypermarket business at just over 2 trillion won.

On the real estate side, 19 company-owned properties among the closed stores are slated for sale. Homeplus has said it plans to raise 1.42 trillion won by selling the 19 locations by February 2028. The proceeds would be used to repay senior trust-secured bonds held by its largest creditor, Meritz Financial Group. Homeplus would then follow through on its bond repayment schedule through 2037 through additional real estate-backed loans and other financing.

This is not Homeplus' first attempt at a sale. Shortly after filing for court receivership in March last year, the company pursued a pre-approval merger and acquisition process, but it fell through after no one submitted a final bid. Homeplus ultimately sold its supermarket division, Homeplus Express, to NS Home Shopping — an affiliate of Harim Group — for 120.6 billion won in May this year.

As the sale process moves forward, discussions on workforce restructuring are expected to intensify. A large number of Homeplus employees have been in effect on forced leave since the closure of 37 stores was decided in May. The number of idle workers is estimated at around 4,000.

Shoppers wait to enter the Homeplus Gangseo store in Seoul on the morning of Aug. 13, when Homeplus reopened its 67 stores. [Herald DB]

soho0902@heraldcorp.com