HomePlus Makes Last-Ditch Effort to Revive with 'Korean Trader Joe's' Model Amid Skepticism

Having had the court's cancellation of the discontinuation of rehabilitation procedures overturned and the deadline to pass its rehabilitation plan extended to early September, HomePlus is making a final attempt at resurrection.

HomePlus has initiated internal discussions to resume operations at 67 stores on August 1st.

The core strategy is to benchmark the U.S. "Trader Joe's" model, focusing on private-label (PL) products, food, and daily necessities.

This is interpreted as a strategy to secure competitiveness by drastically reducing the number of items rather than carrying a massive variety like traditional large supermarkets.

However, the situation remains grim.

To resume operations, HomePlus must receive a stable supply of goods, but trust with suppliers has already been broken as HomePlus frequently failed to pay partner companies for goods due to financial difficulties.

In particular, for PL products, manufacturers must dedicate a portion of their factory lines exclusively to producing specific PL goods, and the products can only be supplied to that specific supermarket, making timely payments from the ordering party essential.

However, HomePlus has previously failed to make some payments smoothly, and due to ongoing management uncertainties, PL suppliers are left in a position where they must shoulder all the risks.

Because the risks are high, suppliers have no choice but to quote higher supply prices, which analysts say will ultimately negatively impact the price competitiveness of PL products.

In the current PL product supply industry, companies are reportedly reluctant to sign contracts due to the risk of bankruptcy if they supply HomePlus, and even existing partner suppliers maintain that it is difficult to resume deliveries unless a clear payment schedule is presented.

Although trust with suppliers has been broken, HomePlus does not have sufficient funds to restore it.

HomePlus plans to use the 200 billion won in emergency operational funds it is set to receive from its largest creditor, Meritz Financial Group, to pay overdue product bills. However, with the scale of unpaid commercial transaction claims and other public-interest claims reaching 940 billion won, 200 billion won falls far short.

Consequently, while it has managed to dodge immediate liquidation, experts evaluate that HomePlus faces an uphill battle before it can successfully revive.

Reported by Lee Ho-geon | Video by Kim Na-on | Graphics by Yook Do-hyun | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.