An exterior view of the Homeplus Namhyeon store. [Herald DB]
An exterior view of the Homeplus Namhyeon store. [Herald DB]

Homeplus is struggling to meet its sales targets even after reopening its stores, and industry watchers say the chain could be forced into a piecemeal sale if no buyer steps forward for the entire business.

According to retail industry sources, Homeplus' sales in early October reached only about 30 percent of its target. Earlier, in mid-September, the company managed just 40 percent of its original sales goal.

During the chuseok holiday period from Thursday to Saturday, daily sales hovered around 3 billion won ($2.24 million). That marks a sharp decline from the 10.63 billion won recorded on Aug. 13, the first day of its reopening. Foot traffic has also been dwindling as some tenants — including CJ Olive Young and Daiso — have pulled out of Homeplus locations. The company has also begun accepting voluntary resignations without severance bonuses, on the condition that it will pay outstanding wages, chuseok bonuses and retirement allowances in full.

Homeplus is pursuing a merger and acquisition deal that would transfer its hypermarket business — including 67 company-owned stores — along with its headquarters through a business transfer agreement. The company, currently undergoing court receivership, has virtually no path to independent survival without an infusion of outside capital through such a deal.

Homeplus has sent investment prospectuses to potential buyers through its sale manager, Samil PwC. The company plans to identify interested parties by the end of this month, but no candidates have emerged so far. If none come forward, a breakup sale becomes increasingly likely.

Homeplus is currently pursuing what is known as a full sale — offloading its headquarters together with its hypermarket operations as a single package. If that proves too difficult, the plan calls for selling off viable individual stores to other retailers or separately disposing of assets with high real estate development and leasing value.

A piecemeal approach would open the door to buyers who lack the capacity to acquire the entire business, potentially improving the odds of a sale. However, selling off stores individually would likely destabilize employment, with the risk of mass layoffs. Homeplus had 9,121 employees as of September, based on national pension enrollment figures. The Homeplus chapter of the Mart Workers' Union issued a statement saying it would "honor its pledge to cooperate toward completing the M&A" and urged the government to "take a direct role in finding a buyer."


korean@heraldcorp.com