Homeplus in Deep Trouble: Considering Voluntary Retirement and Splitting Wage Payments

Homeplus appears to be caught in a bind as it fails to generate expected sales and struggles to make headway in its mergers and acquisitions (M&A) process, despite having its rehabilitation plan approved.

Ahead of the Chuseok holiday, the company decided to prioritize payments for holiday goods supplies while splitting employee wage payments into two installments.

According to the distribution industry on September 16, Homeplus held a meeting with the general labor union and the mart labor union on September 15 to brief them on the company's management situation.

Homeplus reportedly revealed that sales are reaching only about 40 percent of its initial target, and that funds are somewhat insufficient to fulfill its debts according to the rehabilitation plan.

It was reported that the implementation of voluntary retirement was discussed during this process as part of measures to ease the management crisis.

However, as the labor union expressed reluctance toward the implementation of voluntary retirement, pushing forward with it 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 nothing has been finalized regarding its implementation or plans."

Homeplus also decided to pay the unpaid wages for July in September, splitting the payment into two installments on September 20 and September 23.

The payment date for the Chuseok bonus has not even been determined yet.

The policy is to prioritize paying supplier payments to secure merchandise while dividing the wage payments.

Although it has narrowly avoided an immediate bankruptcy crisis, the company is facing liquidity issues with supplier payments and labor costs amid sluggish sales recovery.

Furthermore, the scale of Homeplus's overdue wages amounts to hundreds of billions of won, raising concerns that it will likely act as a factor constraining future liquidity.

According to data received from the Ministry of Employment and Labor by the office of lawmaker Kim Wi-sang of the People Power Party, who sits on the National Assembly's Environment and Labor Committee, the cumulative unpaid wages at Homeplus totaled 387.1 billion won from December of last year to August of this year.

The sale process for its hypermarket business division also appears far from easy.

Homeplus plans to continue the M&A process with the goal of securing at least candidates showing an intent to acquire by October.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.