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Homeplus to close 15 stores, offer unpaid leave amid corporate rehabilitation
Participants call on the government to intervene in the process to normalize Homeplus operations during a press conference held near the presidential office in Seoul, Monday. Yonhap
By Jun Ji-hye
Homeplus, Korea's second largest discount supermarket chain, currently undergoing corporate rehabilitation, plans to gradually close 15 stores where lease negotiations have stalled, the company said Wednesday.
The firm also plans to accept applications for unpaid leave from employees at its headquarters who wish to participate.
“We are moving into an emergency survival management mode,” a Homeplus official said. “The business environment has not improved over the five months since entering the rehabilitation process. This step is necessary to address the situation amid mounting financial pressures.”
The retail chain will proceed with the phased closure of 15 of its 68 leased stores where lease negotiations have not progressed.
The affected stores include Siheung, Gayang, Ilsan, Gyesan, Ansan Gojan, Suwon Woncheon, Hwaseong Dongtan, Cheonan Sinbang, Munhwa, Jeonju Wansan, Dongchon, Jangrim, Busan Gamman, Ulsan Buk-gu and Ulsan Nam-gu branches.
Homeplus has operated more than half of its stores — 68 out of 126 — as leased locations. Following the closure of the Bucheon Sangdong branch on Aug. 1 due to redevelopment, the total number of stores dropped to 125.
Eight stores had already been slated for closure before the rehabilitation process, and with the recent decision to shutter 15 more, the total number of closures will reach 23, leaving 102 stores remaining.
The company will also introduce voluntary unpaid leave for all headquarters employees starting Sept. 1.
The partial salary cuts for executives, in place since March, will be extended until the rehabilitation process is successfully completed.
Homeplus has been under corporate rehabilitation proceedings since March and, with court approval, has been seeking a buyer.
Ahn Su-yong, head of the Homeplus labor union, criticized the move. “The launch of Homeplus’ emergency survival management system is another effort to squeeze the company while MBK Partners, the major shareholder, makes no attempt at self-rescue," Ahn said.
He added, “Although MBK had pledged to sell the company as a whole without splitting it, the latest decision contradicts that promise.”