Homeplus "SSM Sale Not MBK Investment Withdrawal... Full Reinvestment"

Statement Opposing Labor Union Claims

Homeplus has reiterated that the sale of Homeplus Express (a corporate supermarket) is not intended as an exit (investment recovery) by the major shareholder MBK Partners, and that the entire proceeds from the sale will be reinvested.

On the 2nd, Homeplus issued a statement refuting point by point the Homeplus branch of the Mart Union's opposition to the sale of Homeplus Express.

First, Homeplus stated, "The consideration of selling the Homeplus Express business division is one of several strategic options to establish a foundation for sustainable growth amid a severe management environment," adding, "If the sale is completed, the proceeds will be fully used as investment funds to strengthen core competitiveness, such as expanding Homeplus Mega Food Market and enhancing online delivery infrastructure and services, as well as improving the financial structure."

They further emphasized that the division sale is a management decision and not for MBK Partners' investment recovery purposes. They also stated that if the sale proceeds, it will be conducted on the premise of securing employees' job stability.

Homeplus explained, "If the Express sale is successfully completed, Homeplus's business capabilities and financial structure will be innovatively improved," adding, "Based on this, offline marts and store-based same-day delivery online businesses will grow faster, increasing corporate value and strengthening operational sustainability."

Regarding the union's claim that asset sales and restructuring have continued since MBK Partners became the company's major shareholder, Homeplus rebutted, "In 2019, we were the first in the industry to convert 14,283 non-regular workers to regular positions, and despite reduced manpower demand due to declining sales, we have not implemented any artificial restructuring," adding, "We conduct over 1,000 new hires annually."

They continued, "Due to the aging of field personnel, 500 to 600 employees retire annually, and it is true that turnover and resignation rates are high due to the nature of large marts, but as of 2020, Homeplus recorded the lowest turnover rate (8%) among the three major large marts."

Homeplus also responded to criticism that selling key stores weakened competitiveness by stating, "During the asset securitization process, Homeplus chose redevelopment and re-lease methods rather than simple closures for some chronically unprofitable stores, doing its best to maintain employment," adding, "Additional employment stability support funds were also provided to help employees adapt to new workplaces."

Regarding the major shareholder's asset securitization, they explained, "Since MBK Partners' acquisition in 2015, the shareholders have never received dividends even once," and "We have invested about 1 trillion KRW in Homeplus store renewals and strengthening online business."

Since February 2022, starting with the Incheon Ganseok branch, Homeplus has been converting major large marts into Homeplus Mega Food Markets focused on fresh foods. The converted Mega Food Market stores have seen annual sales increase by more than 20%. The online division has also exceeded annual sales of 1 trillion KRW over the past three years.

Homeplus stated, "Our goal is to continue growing as the best distribution company by securing solid competitiveness through selection and concentration, and the sale of Express is being considered within this context," adding, "We will continue to do our best to ensure employees' job stability and grow as a leading distribution company that benefits the public's daily lives."

Meanwhile, the Homeplus union held a "Protect Homeplus! Resolution Rally to Block Secret and Split Sales" in front of the D Tower in Gwanghwamun, Seoul, where MBK's office is located, strongly criticizing the company's plan to split and sell Homeplus Express.

The union stated, "MBK acquired Homeplus in 2015 and attempted to exit after conducting real estate speculation rather than recovering investment funds for management normalization, but failed to exit due to changes in the distribution environment caused by COVID-19 and the high-interest era," adding, "Homeplus, which is sufficiently competitive in offline distribution, continues to incur net losses due to dividends on bank loans and redeemable convertible preferred shares (RCPS) despite generating operating profits because of MBK's management failure," and criticized, "MBK, a speculative private equity fund, is breaking apart Homeplus, which the public has nurtured, solely to recover investment funds, while telling employees to remain silent."

The union has announced a resolution rally for all union members next month, aiming for 1,000 participants.