Store chain Homeplus temporarily closes outlets starting Monday
Seoul, July 13
Financially troubled discount store chain Homeplus said on Monday it has decided to temporarily close its outlets, starting Monday, due to a lack of operating capital and difficulties in maintaining store operations.
The decision came after the Seoul Bankruptcy Court terminated Homeplus' rehabilitation proceedings on July 3, saying the company had failed to secure at least 200 billion won (US$130 million) needed to carry out its self-rescue plan.
The retailer, wholly owned by private equity firm MBK Partners, has been financially strapped by a prolonged slump in the discount store industry and entered court-led rehabilitation in March 2025.
Homeplus has asked its largest creditor, Meritz Financial Group, to provide a 200 billion-won working capital loan, but its request has yet to be accepted.
"Most of our operating funds have been completely exhausted, leaving us unable to make payments to suppliers or cover operating expenses needed to keep our stores open," a company official said.
He said both Homeplus' headquarters and all discount stores will suspend operations starting Monday to ensure security and safety until circumstances change.
MBK Partners acquired a 100 percent stake in Homeplus from British retailer Tesco Plc in 2015 for 7.2 trillion won.
Earlier, the government reviewed the progress in rolling out supportive measures for workers of the troubled supermarket chain Homeplus Co. after a court decided to terminate its rehabilitation proceedings, the finance ministry said.
First Vice Finance Minister Lee Hyoung-il chaired a task force meeting to review the progress in implementing support measures for affected workers and subcontractors after vowing last week to provide up to 21 million won ($13,980) in substitute payments for unpaid wages.
The government said the labour ministry received 692 inquiries and provided information on available support programmes.
The task force also identified 33.3 billion won in unpaid wages for June and vowed to closely monitor any additional delays in wage payments.
South Korea also offered low-interest loans of up to 10 million won at a rate of 1.5 percent within the amount of their unpaid salaries.
— IANS
Reader Comments
It's sad to see so many workers and sub-contractors affected. The government stepping in with loan support and substitute payments is good, but it shows how fragile the retail sector is globally. In India too, small kirana stores are shutting down due to big retail chains not surviving. Need more stable policies.
The court termination of rehabilitation means no more second chances for Homeplus. They couldn't raise even 200 billion won? That's about $130 million USD—peanuts for a big chain. Management must have failed completely. Surprising that a PE firm like MBK couldn't turn this around in 10 years. Very sad for employees.
The lack of working capital is the final nail in the coffin. Meritz Financial should have agreed the loan—saving jobs matters more than profit margins. Governments should regulate PE takeovers more tightly to protect workers. In India, we need bankruptcy courts that act fast but also protect livelihoods.
Well, 692 inquiries and 33.3 billion won in unpaid wages is massive. The labour ministry seems proactive, but the workers must be terrified. 1.5% low-interest loans on unpaid salaries? That's a band-aid. What they need is alternative employment or retraining. A cautionary tale for all retail investors.
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