Homeplus goes dark: Retailer temporarily shutters every store as cash runs out

Homeplus will temporarily shut down its headquarters and all supermarket branches starting Monday, unable to keep operating after running out of cash.

The retailer has spent the past year pushing an aggressive restructuring plan to shore up its business, but it has now exhausted even the minimum funds needed to keep stores running.

Homeplus said it can no longer cover payments to suppliers, let alone basic utility costs such as electricity and water needed to keep stores open.

With normal operations no longer viable, the company will keep stores closed until conditions improve to ensure security and prevent safety incidents.

Tenants operating within Homeplus supermarket buildings may continue business if they choose to stay open, and Homeplus said it would provide safety support for them.

The temporary shutdown comes just ahead of a critical deadline in the company's court-led rehabilitation process.

On July 3, the Seoul Bankruptcy Court decided to terminate Homeplus' rehabilitation proceedings. The court, however, said it would reconsider extending the process if the company submits a plan by July 20 to secure 200 billion won ($132 million) in emergency operating funds.

Homeplus has asked its largest creditor, Meritz Financial Group, for an additional 200 billion won in loans to keep the company afloat, but Meritz has so far turned down the request. 

"It is deeply regrettable that we are at risk of seeing the rehabilitation process come to an end because we have been unable to secure operating funds," a Homeplus representative said.

Homeplus said it will monitor how negotiations with creditors unfold through July 20 — the funding deadline and the date of the court's final ruling — before deciding whether to reopen its stores.

BY KO SEUNG-PYO [[email protected]]