Homeplus Submits Revised Rehabilitation Plan, Targeting 1.2 Trillion Won in Cost Savings

▲ A closed Homeplus store

Homeplus announced on June 29 that it is submitting a revised rehabilitation plan to the Seoul Bankruptcy Court, reflecting improvements in business viability resulting from self-rescue efforts, such as restructuring its hypermarket operations into 67 core stores.

Homeplus, which entered rehabilitation proceedings in March of last year, reorganized its 126 hypermarkets into 67 core locations last month.

The company simplified its business structure by selling off Homeplus Express to NS Shopping, an affiliate of Harim Group.

It also reduced its workforce by approximately 50 percent through natural attrition and voluntary retirement programs.

Homeplus explained, "Compared to just before the rehabilitation filing, various costs have been reduced by approximately 1.2 trillion won. Once the supply chain and operations are normalized, the 67 core hypermarkets can immediately realize an operating profit of 80 billion won, which is expected to grow to 150 billion won within three years."

The company stated that once product supply is normalized, an increase in customers visiting Homeplus will also drive up sales.

Homeplus announced that it plans to fully repay both public interest claims and rehabilitation claims using funds from the transition to a surplus and the sale of real estate from closed stores.

Based on the improved profit structure, the company also intends to pursue mergers and acquisitions (M&A) simultaneously.

The minimum cost required for the rehabilitation of Homeplus remains at 200 billion won, the same as before, making the ability to secure these funds the key issue determining whether the company will be rehabilitated or liquidated.

The deadline for the approval of the Homeplus rehabilitation plan is July 3.

(Photo: Yonhap News)

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