Table of Contents
- How far does the Homeplus crisis extend?
- Background of Homeplus’s review of closing five stores
- Public sale main bidding failed… What direction will the revival process take?
- Intensification of union opposition… Controversy over employment security
- Homeplus, future scenarios… A crossroads of recovery and liquidation
- Conclusion: Homeplus stands at a significant turning point
- Frequently Asked Questions (FAQ)
How far does the Homeplus crisis extend?
The tension in the retail industry is heightening as Homeplus considers closing five stores, including Gyang branch in Seoul, Jangrim branch in Busan, Ilsan branch in Goyang, Woncheon branch in Suwon, and Bukgu branch in Ulsan.
A recent incident in which the public sale's main bidding collapsed has led to a new turning point in the company's recovery process.
This plan to close stores is seen as a vital issue that goes beyond simple store organization, deeply related to Homeplus's survival chances, the continuity of the recovery plan, or the risks of liquidation and bankruptcy. The impact of this situation on Homeplus and the retail market is drawing attention.
Background of Homeplus’s review of closing five stores
Recently, Homeplus's review of store closures contradicts the promise made by MBK's chairman last September, who stated, "We will not close stores until the M&A is finalized."
At that time, the chairman emphasized job security to dispel fears about large-scale restructuring, but the situation is rapidly changing due to worsening cash flow.
A key factor is the increasing number of delivery interruptions. Partners are halting supplies due to concerns about payment delays.
Additionally, there are cases where leasing store owners are requesting to exit. Some stores are facing conditions that make it difficult to continue operations.
Finally, there is a significant outflow of personnel. The situation has worsened to the point where staffing is becoming difficult in store operations.
Currently, while the closure schedule of Homeplus has not been finalized, it appears that the locations under consideration for closure this year are already included among the 15 stores previously planned. This is interpreted as a signal that restructuring is restarting.
The 15 locations that will gradually close in the future include the Siheung branch, Gayang branch, Ilsan branch, Gyeyang branch, Ansan Gojan branch, Suwon Woncheon branch, Hwaseong Dongtan branch, Cheonan Sinbang branch, Daejeon Munhwa branch, Jeonju Wansan branch, Daegu Dongchon branch, Busan Jangrim and Gamman branches, and Ulsan Bukgu and Namgu branches. Specific details of this closure plan can be found in the post below.
Public sale main bidding failed… What direction will the revival process take?
According to the announcement made at the Seoul Rehabilitation Court on November 26 at 3 PM, there were no bidders for Homeplus's public sale main bidding.
This situation is interpreted as reflecting concerns about Homeplus’s business viability in the M&A market.
The implications of the failed bidding are serious. With major candidates effectively withdrawing, there are no additional participants apart from Harex Infotech and Snomad, who had previously shown interest.
This has increased the pressure to prepare a recovery plan. The submission deadline is approaching on December 29, 2025, leaving just over a month.
Moreover, the possibility of a second sale attempt remains uncertain. The court stated it would consider "all possibilities including re-bidding,” but the market has shown a tepid response.
Furthermore, the method of selling Homeplus involves the complete free liquidation of common shares held by the majority shareholder MBK Partners, followed by issuing new shares. This presents considerable risk for new investors.
Intensification of union opposition… Controversy over employment security
The union regards this action as effectively the beginning of closures and restructuring and continues to fight strongly.
Since November 8, they have entered a hunger strike near the presidential office, with some members refusing even water and salt. They insist that "the responsibility for management failure should not be transferred to employees" and are demanding government intervention in the Homeplus situation.
In response, Homeplus has promised 100% job security for employees slated for closure and is planning to reassign them to other locations. However, there remains distrust on-site, complicating the situation.
Homeplus, future scenarios… A crossroads of recovery and liquidation
Currently, there are three potential directions that Homeplus may face.
The first scenario is drafting a recovery plan, obtaining court approval, and concurrently proceeding with restructuring and store closures. This is the most realistic option, as a large-scale reduction of stores is unavoidable, and meeting the court's approval criteria is key.
The second option is a push to resume a second M&A attempt. However, due to negative market reactions, this possibility seems low. In this case, additional negotiations between the court and Samil Accounting Corporation would be necessary.
Finally, if recovery fails, it may transition to liquidation or bankruptcy procedures. Liquidation of a major retailer is likely to have significant impacts on society and the economy, making careful judgment from the court anticipated.
A comprehensive look at the current situation indicates that submitting a recovery plan independently appears to be the most viable choice. However, given that liquidity deterioration is progressing rapidly, the likelihood of liquidation cannot be ruled out, according to industry opinions.
Conclusion: Homeplus stands at a significant turning point
Homeplus is currently facing a serious situation. They are considering closing five stores by the end of this year, and multiple crises are arising simultaneously, such as the failure of the main bidding for the M&A.
In particular, the loss of personnel and distribution networks is a significant threat to the company's sustainability. The recovery plan to be submitted on December 29 is expected to play a crucial role in determining Homeplus's future.
Depending on the outcome of this plan, Homeplus may move towards partial recovery, large-scale restructuring, or liquidation procedures. The coming weeks are expected to be a very critical time in Homeplus's history.
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Frequently Asked Questions (FAQ)
Q. Which stores is Homeplus considering closing by the end of this year?
Homeplus is reviewing the closure of five stores: Gyang branch in Seoul, Jangrim branch in Busan, Ilsan branch in Goyang, Woncheon branch in Suwon, and Bukgu branch in Ulsan.
Homeplus is currently considering the closure of five stores amid a crisis in the retail industry. The stores in question are the Gyang branch in Seoul, Jangrim branch in Busan, Ilsan branch in Goyang, Woncheon branch in Suwon, and Bukgu branch in Ulsan. This closure plan is not just about store organization but closely related to the company's survival, the continuity of the recovery plan, and the possibility of liquidation, garnering industry attention.
Q. What led to the failure of the recent main bidding for Homeplus's public sale?
No participants in the public sale's main bidding reflected concerns about Homeplus's business viability in the market.
On November 26, 2023, in the Seoul Rehabilitation Court's public sale main bidding for Homeplus, there were no bidders at all. This is interpreted as a result of growing doubts about Homeplus's business viability in the M&A market. Major candidates have withdrawn, leaving only Harex Infotech and Snomad as interested parties, which has increased pressure to prepare a recovery plan.
Q. How is the Homeplus union reacting regarding store closures and restructuring?
The union opposes the closures and restructuring, continuing strong protests, including hunger strikes.
The Homeplus union views this closure and restructuring as an effective start and is strongly opposing it. Since November 8, they have been conducting a hunger strike near the presidential office, with some members refusing even water and salt. They argue that the responsibility for management failures should not fall on employees and are calling for government intervention. On the other hand, the company has promised job security for 100% of laid-off employees and is planning reassignment, but distrust remains on-site.
Q. What possible management scenarios could unfold for Homeplus in the future?
Homeplus may proceed with a recovery plan approval followed by restructuring, re-attempting M&A, or transitioning to liquidation and bankruptcy processes.
Homeplus is likely to progress in three main directions in the future. Firstly, the most realistic scenario involves drafting a recovery plan and obtaining court approval while simultaneously undertaking store closures and restructuring. Secondly, they may attempt a second sale, although negative market sentiments lower this likelihood. Finally, if recovery fails, liquidation or bankruptcy processes could ensue, which would require careful judicial judgment given the significant societal and economic impacts.
Q. What impacts do the closure plans and sale failure have on Homeplus’s management?
Store closures and sale failures have intensified financial crises, including liquidity deterioration and personnel outflow.
The closure of five stores and the failure of the public sale main bidding have led to a deterioration in Homeplus's cash flow and a significant outflow of personnel. There have also been instances of suppliers halting deliveries and leasing store owners requesting to exit, complicating the management environment. As a result, the company's recovery potential is threatened, and the recovery plan to be submitted on December 29 is becoming a crucial turning point for Homeplus's future.