Homeplus CEO stresses unity to overcome retail slump

Homeplus CEO Im Il-soon, left, shakes hands with an employee at a store branch in Incheon, Gyeonggi Province, in this file photo. / Courtesy of Homeplus

By Kwak Yeon-soo

Homeplus CEO Im Il-soon sent a note to her employees on Monday, saying the company will “make every effort” to lead a robust growth, despite a slump in the offline retail business.

This comes after the company posted 7.65 trillion won ($6.38 billion) in sales from March last year to February this year, down 3.67 percent from 7.93 trillion a year earlier.

Its operating profit fell 57.59 percent year-on-year to 109 billion won during the same period.

“In recent years we've had a tough economic environment, intense competition and fundamental shifts in how customers shop,” Im said. “These external factors led to a decline in sales and increase in costs, clouding the outlook for offline retailers.”

Homeplus CEO Im Il-soon's handwritten letter to employees / Courtesy of Homeplus

According to Im, some of the major challenges that the company faces include government regulations and market saturation that make it difficult to meet the needs of customers who prefer low prices and convenience.

The CEO also mentioned Korea's convenience stores per population density is even higher than that of Japan.

To counter these challenges, Im announced a package of changes in Homeplus that will be sustainable over the long term.

The planning includes expansion of “Homeplus Special,” a new type of store that combines characteristics of hypermarkets and warehouse-style stores, a community-based mall “Corners” and a convenience store brand Homeplus Express. Im also mentioned the necessity to upgrade its mobile business to improve logistics competitiveness and focus on fresh foods to lure customers.

Homeplus has been transforming to Homeplus Special stores since June 2018, and seen its business growing at 20 percent year-on-year.

"I am confident that through our efforts, we will become a leader in the offline retail business,” Im said.

“We are aiming for a more sustainable, resource-efficient business model compared to our rivals, and I ask our employees to stand by me to achieve robust growth together in the future,” she added.