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Homeplus enters 'survival' mode with closure of 15 stores

Published: 13 Aug. 2025, 18:33 Updated: 13 Aug. 2025, 18:41

The Homeplus Incheon Sungui branch in Incheon on May 27 [NEWS1]

Homeplus is going into survival mode.

The embattled retail chain, currently under a court-led corporate rehabilitation process, will sequentially close 15 stores nationwide where rent adjustment negotiations have failed, and will offer voluntary unpaid leave to all headquarters staff.

The decision comes amid delayed merger and acquisition (M&A) proceedings and growing financial strain.

“Five months have passed since the rehabilitation process began, but the financial situation has not improved,” said Homeplus on Wednesday, declaring that it is entering emergency survival management mode.

“The government’s exclusion of large discount stores from the list of outlets eligible for the consumption coupons significantly reduced sales, while the rehabilitation process has worsened liquidity pressure and made it difficult to secure external financing,” the company said.

Some suppliers have shortened settlement periods or demanded advance payments and deposits, further aggravating cash flow, according to Homeplus.

The chain will close 15 of its 68 leased stores where negotiations for a 30 to 50 percent rent reduction have made no progress. The targeted stores are the Siheung and Gayang branches in Seoul; Ilsan branch in Goyang; Gyesan branch in Incheon; Ansan Gojan branch; Woncheon branch in Suwon; Dongtan branch in Hwaseong; Sinbang branch in Cheonan; Munhwa branch in Daejeon; Wansan branch in Jeonju; Dongchon branch in Daegu; Jangnim and Gamman branches in Busan; and Buk-gu and Nam-gu branches in Ulsan.

Shoppers look at meat on display at the Homeplus Gangseo branch in western Seoul on July 24. [YONHAP]

Once the closures are completed, the number of large-scale retail stores will drop from 125 to 102 across the country. Including 11 stores slated for re-entry, the total could recover to 113, though the timeline remains uncertain.

Homeplus said it will maintain employment for staff at the closed stores and apply its job stability support system to help employees adjust to new workplaces.

Starting Sept. 1, the company will implement voluntary unpaid leave for all headquarters employees, and extend partial salary reductions for executives — in place since March — until the rehabilitation succeeds.

“If the current situation continues, rehabilitation through a preapproval M&A could itself be in jeopardy,” Joh Joo-yun, co-CEO of Homeplus, said. “We entered the final stage of survival management.”

The Homeplus local of the Mart Labor Union criticized the move, saying, “Major shareholder MBK Partners is squeezing the company without making any self-rescue efforts” and “store reductions amount to giving up on Homeplus.”

Homeplus framed the issue as not just a business matter but one directly tied to the livelihood economy and job stability, and called for policy support from the government.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom staff.
BY JEONG JAE-HONG [[email protected]]