Homeplus suspends operations at 37 large-format stores... "Will minimize customer attrition"

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[The Financial News] Homeplus has begun restructuring its large-format store network after signing a sale agreement for Homeplus Express, its SSM business unit. The company plans to shut down low-profit stores and shift to an operating model centered on key locations to normalize its rehabilitation process.
According to the industry on the 8th, Homeplus will temporarily suspend operations at 37 of its 104 large-format stores from the 10th through July 3. It plans to concentrate product supply and operational capacity on the remaining 67 core stores.
The move comes in response to tighter delivery terms and reduced supply from business partners after the rehabilitation process made it difficult to provide stable goods to all stores. Homeplus aims to preserve competitiveness in major commercial districts and minimize customer attrition by prioritizing limited inventory for core stores.
Employees at the suspended stores will receive leave pay equal to 70% of their average wages. Those who wish to do so will be reassigned to other stores that remain open. However, malls and leased shops inside the stores will continue to operate normally.
Homeplus is currently preparing a revised rehabilitation plan that reflects the demands of its creditors. The plan is expected to include measures to improve store operating efficiency and push ahead with the sale of remaining business units.
A Homeplus official said, "Since the rehabilitation process began, sales have fallen sharply as major suppliers have tightened trading terms and cut deliveries." The official added, "This measure is intended to lay the groundwork for normalizing operations by concentrating available products in core stores."
Securing additional operating funds is another variable. Homeplus has asked its largest creditor, Meritz Financial Group, for a bridge loan and debtor-in-possession (DIP) financing to support short-term operations. However, no concrete response has been reported so far.
A Homeplus official said, "If the rehabilitation process is halted because funds are not supplied in time, social costs could rise, including large-scale job insecurity, damage to partner companies, and a contraction in local commercial districts." The official added, "As the largest creditor, Meritz is expected to consider its social responsibility and the value of coexistence and make a forward-looking decision as an inclusive financial institution."
Meanwhile, Homeplus signed an asset transfer agreement with NS Shopping, an affiliate of Harim Group, the day before for the transfer of Homeplus Express's operating rights. Industry observers say the simultaneous sale of Homeplus Express and the store-efficiency drive has brought the company's rehabilitation process to a critical turning point.
localplace@fnnews.com Kim Hyun-ji Reporter