[Editorial] Homeplus faces bankruptcy risk; prepare for the fallout on jobs and the local economy

With the Seoul Bankruptcy Court deciding to terminate Homeplus' corporate rehabilitation process, the once No. 2 hypermarket chain in South Korea has effectively entered the bankruptcy phase. Because it failed to secure the 200 billion won needed to carry out its rehabilitation plan, bankruptcy now appears unavoidable. If the funding issue is resolved over the next two weeks, there is still a chance for a dramatic recovery through the rehabilitation process. The Homeplus case is not simply about the disappearance of one large retailer. It is a serious issue that could shake the livelihoods of employees, suppliers, tenant store owners, and even local commercial districts.
The most immediate concern is the economic shock that would follow liquidation. Homeplus is said to directly and indirectly employ about 13,000 people, including parking, cart management, and cleaning staff. If those jobs disappear overnight, the number of unemployed workers will surge. Small and midsize businesses, as well as merchants that have done business with Homeplus, are also deeply worried. They are reportedly struggling to manage cash flow because they have not been properly paid for deliveries. Fortunately, the government has introduced measures such as advance wage payments and living-expense loans for workers harmed by unpaid wages, along with emergency liquidity support for partner companies. However, these steps can only serve as temporary fixes. If Homeplus shuts down, the jobs will be gone entirely, and small business owners will lose a major trading partner altogether.
The impact on the local economy cannot be ignored either. If stores close one by one across regions, foot traffic in nearby commercial areas will decline, and the effect on local tax revenue will also be significant. The government should therefore consider measures that look beyond the immediate crisis, including support for reemployment among those who lose their jobs. It must also closely examine whether any stakeholders could be left in a blind spot if liquidation proceeds.
At the same time, this crisis should be seen as a structural problem affecting the offline retail sector as a whole, including hypermarkets. Homeplus' collapse has also raised questions about responsibility between the major shareholder and creditors. But beyond that, it is time to properly read the direction of the retail industry and rebuild a strategy for development. As consumption rapidly shifts to e-commerce, the profitability of the hypermarket format itself is deteriorating structurally. Simply reducing stores and cutting costs will not guarantee a turnaround in operations. In fact, the offline retail sector is going through its harshest winter. So bleak is the outlook that even if Homeplus' remaining stores are put up for sale, rival hypermarket chains are expected to be reluctant to acquire them.
The remaining hypermarket chains must now carefully review survival strategies, including new business models that combine online and offline operations, as well as a shift toward more community-based services. The government, too, should draw up a medium- to long-term policy framework that supports business transformation and reemployment, taking into account the social costs that arise when large-scale retail businesses that have created many jobs begin to collapse.
Homeplus has just over two weeks left. Whatever the outcome, tens of thousands of livelihoods are at stake. The government must therefore prepare a safety net in advance for the worst-case scenario.