Homeplus Confirms Asset Securitization of Daejeon Dunsan Branch Amid Business Difficulties

Third Branch Following Ansan and Daejeon Tanbang Locations

[Asia Economy Reporter Minyoung Cha] Homeplus announced on the 4th that the asset securitization of its Daejeon Dunsan branch has been confirmed.

Homeplus has planned to secure liquidity through asset securitization of around three stores and has confirmed the Daejeon Dunsan branch as the target store following the Ansan branch and Daejeon Tanbang branch in July. The funds raised through asset securitization will be used to secure liquidity for improving the financial structure and to transition into an all-line distribution company.

This asset securitization decision was made due to the deterioration of the large mart industry. In June, Homeplus recorded sales of 7.3002 trillion KRW for fiscal year 2019 (FY2019), a 4.69% decrease compared to the previous year, and a net loss of 532.2 billion KRW, as offline retail business slumped and the impact of COVID-19 led to a sharp decline in sales. This year as well, the spread of COVID-19 continues, resulting in a decrease in the number of visitors to offline stores.

Homeplus plans to maintain operations for at least one year so that employees working at the Daejeon Dunsan branch and store owners in the mall can adapt to the changes following the asset securitization decision.

Similar to the Ansan and Daejeon Tanbang branches, employees working at the Daejeon Dunsan branch will retain their employment even after the store closes. Homeplus plans to consider transferring these employees to nearby stores, as well as moving them to business divisions showing growth in line with distribution trends, such as the online business and the corporate supermarket (SSM) Homeplus Express. When the Bucheon Jungdong branch and Dong Gimhae branch closed in 2018, all employees were also reassigned to nearby stores.

A Homeplus official stated, “Although the Daejeon Dunsan branch will cease operations, there will be absolutely no workforce restructuring,” and added, “We will conduct interviews considering the status of each business site where transfers will take place and employees’ commuting distances, allowing sufficient time to minimize inconvenience caused by transfers.” He emphasized, “We will maintain operations for at least one year and continue thorough communication so that store owners can flexibly prepare for the changes.”