Homeplus, Approved for Rehabilitation Plan, Faces Chuseok as First Test...Sales Recovery Key

[Financial News] Homeplus has escaped the risk of bankruptcy after the court approved its rehabilitation plan, but the upcoming Chuseok holiday is expected to be its first test for returning to normal operations. As product supplies have yet to fully recover, industry observers say how effectively Homeplus responds to Chuseok—one of the year’s biggest peak seasons—will determine the pace of future sales recovery and normalization.
According to the retail industry on the 3rd, Homeplus began a full-scale return to normal operations centered on 67 stores after escaping the risk of bankruptcy following the court’s approval of its rehabilitation plan the previous day. Under the plan, the company intends to pursue debt repayment and financing while accelerating efforts to normalize store operations and restore its product competitiveness.
However, some say there is still a long way to go before substantial normalization is achieved. Hypermarkets typically operate by receiving products from suppliers, selling them, and then paying for the goods according to an agreed payment cycle. Homeplus, by contrast, is currently paying suppliers in advance within the limits of its available operating funds, restricting the volume of goods it can secure. As a result, its product selection and inventory levels remain below those of competitors such as Emart and Lotte Mart.
A Homeplus store in Seoul visited that day was operating normally, but empty shelves were noticeable throughout the store. Private-label products and certain specific items occupied a substantial portion of the displays, while household goods had been placed in some fresh-food display areas. Although operations had resumed, the store’s product selection and inventory had yet to recover sufficiently.
A customer visiting Homeplus said, "It looks more like the store is operating on a reduced scale than operating normally," adding, "Although the shelves are stocked with products, it is disappointing that the variety and inventory are insufficient compared with other supermarkets."
The approaching Chuseok holiday is a considerable burden for Homeplus, particularly because it is one of the major peak seasons for hypermarkets. Chuseok is one of the biggest sales periods of the year, when demand for gift sets as well as fresh and processed foods surges. Emart and Lotte Mart have already begun targeting holiday demand by introducing Chuseok products and accepting advance reservations for gift sets.
Homeplus, by contrast, has yet to launch its Chuseok gift sets. The industry therefore views how effectively the company responds to demand this Chuseok as its first test of the extent to which operations have normalized since the rehabilitation plan was approved.
However, given current supply conditions, observers expect it will be difficult for Homeplus to secure the ability to respond to holiday demand at the level of its competitors in the short term.
An industry official explained, "The holiday season is an important period when sales increase as additional demand for gift sets and ceremonial goods is added to the everyday food items normally sold," adding, "Hypermarkets typically begin competing over advance reservations and sales of gift sets ahead of the holidays. If Homeplus has not yet fully launched those operations, it may be difficult to respond adequately to the Chuseok peak season."
Even if Homeplus clears its first test, Chuseok, it still faces numerous challenges before achieving full normalization. First, it must steadily restore transactions with suppliers, improve its product selection and price competitiveness, and bring the sales and profitability of its 67 stores back onto a normal track. It must also secure funds for debt repayment by completing the sale of company-owned stores and raising additional financing without disruption. In the long term, it will need to regain customer trust and secure new growth engines.
The union also emphasized that court approval of the rehabilitation plan was only the starting point for normalization and that substantive management recovery must follow. At a press conference that day, Ahn Soo-yong, head of the Homeplus branch of the Mart Industry Union, said, "Approval of the rehabilitation plan is not the end but a new beginning," adding, "The most important task now is for Homeplus to be reborn as a sustainable company. To achieve this, it must above all find a suitable buyer and ensure the successful completion of a merger and acquisition (M&A) deal."


[email protected] Jang Yu-ha Reporter