Homeplus buyer search clouded by debt, labor challenges

Homeplus, which had been on the brink of liquidation, cleared a major legal hurdle with the court’s approval of its rehabilitation plan earlier this month. But while finding a new owner to continue the business is essential to Homeplus’ long-term recovery, it remains uncertain whether the company can attract a buyer given its substantial liabilities, labor-related challenges and a structural slump in traditional retail, industry officials said Monday.

The decision by the Seoul Bankruptcy Court on Sept. 2, following a creditors’ meeting, formally allowed the retailer, controlled by private equity firm MBK Partners, to carry out the debt repayment and restructuring measures outlined in the plan.

“After selling closed stores, we will pursue a merger and acquisition of the company itself to repay the remaining debt,” MBK Vice Chairman and Homeplus co-CEO Kim Kwang-il told the meeting.

The retailer plans to divest 19 company-owned properties out of its 54 defunct locations by February 2028 to satisfy its outstanding debt obligations, and then push for a full company sale to fulfill its commitments to creditors.

According to market insiders, around five prospective investors are being mentioned as potential buyers, including Naver, the country’s largest local online portal and a major e-commerce platform.

For Naver, Homeplus’ physical network could enhance its fulfillment infrastructure, which currently relies on external partners such as CJ Logistics.

Within traditional retail, Hyundai Department Store Group and GS Retail are regarded as potential bidders that could leverage Homeplus to bolster their large-format retail and rapid-delivery capabilities.

Harim, the country’s largest poultry processing company, which previously acquired Homeplus Express through its affiliate NS Shopping, is also considered a potential buyer.

Homeplus’ earlier push to engineer a sale before finalizing the restructuring plan last year ended without receiving a single binding letter of intent.

Furthermore, Homeplus’ underlying value has diminished due to the liquidation of real estate during the 18-month legal process, reducing the company’s appeal to potential buyers.

Broader industry headwinds have added to the uncertainty. Figures from the National Assembly Research Service reveal that Korean hypermarket revenues contracted by an annual average of 4.2 percent from 2021 to 2025, contrasting sharply with a 10.1 percent annualized growth rate in online retailing over the same period.

Any prospective owner must also assume responsibility for some 9,400 workers, deal with multiple union bargaining units and settle outstanding trade debts owed to small vendors.

“Homeplus retains considerable appeal through its national footprint and fresh goods distribution networks, yet slumping market trends and post-deal liabilities present a tough sell for corporate boards,” an industry official familiar with the issue said on condition of anonymity.