Jun Ji-hye, a reporter at the finance desk of The Korea Times, focuses primarily on economic policy and government agencies, mainly covering the Ministry of Finance and Economy, the Ministry of Budget and Planning, the National Tax Service and the Korea Customs Service. She previously covered financial authorities, including the Financial Services Commission and the Financial Supervisory Service, and earlier worked on the political, city and business desks, reporting on a wide range of issues.
Homeplus back in business, faces 3-week survival test
Shoppers browse a Homeplus store in Seoul, Sunday. Yonhap
By Jun Ji-hye
Retailer aims to restock shelves, win back customers after monthlong closure
Homeplus, which had been on the brink of closure, is accelerating efforts to normalize operations after securing 200 billion won ($141 million) in emergency operating funds, company officials said Monday.
Whether the large-scale retailer can restore customer trust and sales and prove its viability by the Sept. 4 deadline for approval of its rehabilitation plan will be a key test of its recovery, according to industry watchers.
Homeplus resumed online orders at 2 p.m. Monday, following the reopening of 67 key stores nationwide on a trial basis last Friday. The retailer plans to resume full operations Thursday, along with marketing campaigns aimed at attracting customers.
The reopening comes about a month after the 67 stores were temporarily closed starting July 13.
Homeplus has been under court-led rehabilitation proceedings since March 4 last year. But the Seoul Bankruptcy Court ordered the proceedings terminated on July 3, saying the firm was unlikely to raise the necessary funds on its own after struggling to secure the 200 billion won in minimum operating funds required to implement its rehabilitation plan.
The situation improved after Meritz Financial Group, the retailer’s largest creditor, approved a debtor-in-possession (DIP) loan on July 16, after Michael ByungJu Kim, chairman of Homeplus’ largest shareholder, MBK Partners, agreed to guarantee the entire 200 billion won. Homeplus filed an immediate appeal against the court’s decision on July 20, and the court subsequently overturned the termination order and extended the deadline for the company to submit its rehabilitation plan to Sept. 4.
The industry views the resumption of Homeplus’ operations as a critical watershed moment for its rehabilitation. Restoring normal operations to boost revenue and maintaining stable transactions with suppliers are widely considered essential to improving the feasibility of its rehabilitation plan.
The resumption of online orders marks another step in restoring the company’s operations, expanding beyond physical stores to delivery services.
Online delivery initially resumed across 20 stores in the Seoul metropolitan area, about half of the 41 locations that were operating before the suspension.
“We will continue to expand our product offerings and delivery coverage,” a Homeplus official said. “Services in some regions may face temporary constraints depending on delivery capacity.”
Ahead of Thursday’s official reopening, Homeplus also plans to address operational issues identified during the soft launch, focusing on payment, logistics and inventory management systems. Ensuring enough products to fill empty shelves and keeping operations stable remain as challenges for the company.
The retailer’s supply chain has suffered a severe blow after major manufacturers halted or reduced shipments amid uncertainty over payments. On the first day of the trial run last Friday, the shelf stocking rate was at just 30 percent.
Industry estimates suggest Homeplus will need substantial capital to secure enough inventory for normal store operations.
“A single store requires a minimum inventory of 3 billion won to 4 billion won. Even if all of the DIP financing is poured into inventory, it is unlikely to be enough to fully restock all locations,” a hypermarket industry official said.
In response, Homeplus is prioritizing fast-moving, frequently purchased items, focusing its initial restocking efforts on fresh food and private-label products.
The company is also looking to overhaul its store format over the longer term by converting some multistory locations into single-floor spaces. The move is aimed at making more efficient use of limited cash while boosting inventory turnover and store profitability.
But restocking shelves is only the first step. Homeplus must also lure back tenant businesses that left during the monthlong closure, as well as consumers who shifted to rival retailers and online shopping platforms.
“Preparations for the reopening are proceeding as planned, with all products expected to be stocked by Thursday,” the Homeplus official said. “We are working to restore normal operations as quickly as possible and successfully complete the rehabilitation process.”