Homeplus, Approved for Rehabilitation, Shortens Supplier Payment Cycles to Accelerate Normalization

[Financial News] Homeplus has shortened its payment cycle for suppliers to restore normal operations. As rebuilding supplier confidence has emerged as a key task following the rehabilitation proceedings, the company plans to accelerate payments for goods and speed up the reorganization of its stores around groceries.
According to industry sources on the 6th, Homeplus has been paying many suppliers for goods at intervals ranging from a minimum of 10 days to a maximum of 30 days since resuming operations on the 13th of last month. Some fresh-food suppliers are reportedly subject to payment terms of up to 60 days. Compared with the previous practice of settling payments for fresh-food deliveries every three months, the payment cycle has been shortened by roughly two-thirds.
Homeplus is also understood to have paid advance payments of ₩100 million to some suppliers while securing inventory during the early stages of its operational restart. The measure is seen as an effort to rebuild trading confidence weakened during the rehabilitation proceedings and restock products on store shelves. Homeplus stores currently have substantial supplies of major food and beverage items.
However, not all supplier concerns have been resolved. Homeplus is reportedly behind on approximately ₩500 billion in supplier payments. With unpaid bills still outstanding, maintaining a stable settlement process going forward is considered crucial to restoring normal business relations.
Homeplus views confirmed customer demand since its reopening as evidence that operations are returning to normal. According to Homeplus, sales totaled ₩116.4 billion during the approximately one month following its reopening in August, up 57% from the same period before the suspension of operations. During the same period, customer traffic rose 38%, while the number of purchasing members increased 255%.
The company’s store operating model will also change. After receiving court approval for its rehabilitation plan, Homeplus plans to improve operating efficiency by converting multilevel stores into single-floor locations and reducing the total floor area of each store. Its product mix will also be streamlined around groceries and fast-moving necessities, while the share of private-label (PB) products will be expanded. The strategy draws on the model of U.S. retailer Trader Joe’s.
Homeplus believes that once supplier deliveries return to normal, it can quickly restore operations by reorganizing its stores around groceries.
A Homeplus official said, "We have significantly improved profitability by closing loss-making stores and cutting various costs," adding, "Because we have a solid customer base, we believe a full return to normal operations will be possible once regular deliveries resume."

[email protected] Kim Hyun-ji Reporter