▲ HomePlus
HomePlus appears to be caught in a dilemma as it fails to generate expected sales despite receiving approval for its rehabilitation plan, while also struggling to make headway in mergers and acquisitions (M&A).
Ahead of the Chuseok holiday, the company decided to prioritize payments for holiday goods suppliers while splitting employee wages into two separate installments.
According to the retail industry on September 16, HomePlus held a meeting with the general labor union and the mart labor union the previous day to brief them on the company's business situation.
HomePlus reportedly revealed that its sales are reaching only about 40 percent of its initial targets and that it falls somewhat short of fulfilling its debts as outlined in the rehabilitation plan.
During the meeting, the implementation of a voluntary retirement program was reportedly discussed as part of measures to ease financial difficulties.
However, as the labor union expressed reluctance toward the voluntary retirement plan, its implementation has been put on hold for now.
A HomePlus official stated, "It is true that voluntary retirement was reviewed as one of the measures for management normalization, but whether to implement it and the specific plans have not been decided."
HomePlus also decided to pay the unpaid wages for July in September, splitting the payment into two installments on the 20th and the 23rd.
The company has not even been able to set a payment date for Chuseok bonuses yet.
The rationale is to prioritize supplier payments to secure merchandise while dividing wage disbursements.
While the company has averted an immediate risk of bankruptcy, it is experiencing liquidity issues involving supplier payments and labor costs amid sluggish sales recovery.
The scale of HomePlus's unpaid wages also amounts to hundreds of billions of won, making it highly likely to act as a factor constraining future liquidity.
According to data received from the Ministry of Employment and Labor by the office of People Power Party Representative Kim Wi-shang of the National Assembly's Environment and Labor Committee, the cumulative unpaid wages at HomePlus from December of last year to August of this year reached a total of 387.1 billion won.
The sale process for its hypermarket business division also appears to be far from easy.
HomePlus plans to continue the M&A process with the goal of securing at least candidates showing acquisition interest by October.
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