[Report] Homeplus Breathes a Sigh of Relief After 'Homeplun'... Concerns Over Payment Settlement Still 'Ongoing'

First Weekend After Commencement of Rehabilitation Proceedings
Continued Customer Visits Centered on Food Hall
28th Anniversary Discount Promotion
Home Appliance Section with High Average Spending Remains Quiet
Sustainability of Cash Inflow Strategy Through Business Operations Under Scrutiny

On the 8th, the fifth day since Homeplus entered corporate rehabilitation proceedings, a 'Homeplus Mega Food Market' in Gyeonggi-do, operated as a specialty food store, was bustling with customers eager to do their postponed shopping over the weekend. Consumers filled their shopping baskets with meat, eggs, vegetables, frozen foods, and more, forming long lines at the checkout counters. Employees were steadily restocking empty spaces on the shelves with sauces, refrigerated and frozen foods, and dairy products. Contrary to concerns that some food suppliers might halt deliveries due to liquidity issues, potentially leaving Homeplus shelves empty over the weekend, the scene was quite different. A Homeplus employee said, "As you can see, there is no significant problem with product supply. While some stores in rural areas or smaller locations might experience supply difficulties, unlike the external perception, there seems to be almost no impact such as a decrease in customers."

On the first weekend since Homeplus entered corporate rehabilitation proceedings, consumers are waiting to check out at a Homeplus Mega Food Market in the metropolitan area on the 8th. Photo by Kim Heung-soon

Earlier, starting from the 28th of last month, Homeplus has been holding a solo super sale event called 'Homeplun is BACK' to celebrate its 28th anniversary, attracting a surge of demand for affordable groceries, resulting in a bustling food hall filled with family customers. A man in his 60s who visited the meat section to buy more of the 'Canadian Pork Belly' offered at 790 KRW per 100g during the first week of the event left disappointed after an employee informed him that the product was sold out.

According to Homeplus, from the start of the rehabilitation proceedings on the 4th through the 9th, including the first weekend, sales at stores nationwide were at a similar level compared to the same period during last year's Homeplun event, based on the company's own data. Additionally, the number of visitors increased by about 5%, indicating performance not falling short of the record-breaking previous year's event.

However, the atmosphere was quite different in the home electronics section, where the average spending per customer is higher. Even after some partners like LG Electronics temporarily halted product supply, Homeplus displayed pre-stocked items such as refrigerators, washing machines, vacuum cleaners, TVs, and mobile phones, but customer foot traffic was sparse. A home electronics sales staff member said, "The news about product supply suspension was only an issue for about a day, and there was no difficulty in obtaining products." However, they added, "Perhaps due to consumer anxiety, cancellation and return requests have been coming in, especially for products with short delivery times." Another sales associate in the electronics section explained, "Even without this incident, delivery of home appliances typically takes about 7 to 10 days. So, even if supply is interrupted for a day or two, it is unlikely that consumers will fail to receive their products on time."

On the first weekend since Homeplus entered corporate rehabilitation proceedings, on the 8th, consumers are browsing the food section shelves at a Homeplus Mega Food Market in the Seoul metropolitan area. Photo by Kim Heung-soon

Homeplus stated that unlike financial bonds whose repayment is deferred due to the rehabilitation proceedings, trade receivables such as payments to suppliers, tenant settlements, and employee salaries will be paid without issue through normal business operations. The monthly payment amount due to suppliers is around 300 billion to 350 billion KRW, and sales settlements to tenants range from 50 billion to 70 billion KRW. Including approximately 56 billion KRW in employee salaries, the total monthly trade receivables amount to about 500 billion KRW. Homeplus disclosed available cash reserves of about 300 billion KRW, with an expected net cash inflow of around 300 billion KRW per month from ongoing business activities.

However, Homeplus employees met on-site expressed concerns about how the situation will unfold after the 'Homeplun' discount event ends on the 12th. A clerk working in the food hall said, "Thanks to the large-scale discount event, consumer interest has been sustained, but to maintain competitiveness through such events, smooth payment and promotional activities must be ensured." They frowned and added, "Negative issues have been highlighted extensively, and controversies related to the private equity firm MBK Partners, the owner of Homeplus, have been ongoing for a long time, so I am not sure if this part can be improved."

On the first weekend since Homeplus entered corporate rehabilitation proceedings, on the 8th, at an electronics specialty section within a Homeplus Mega Food Market in the Seoul metropolitan area. Photo by Kim Heungsoon

Suppliers are also closely monitoring the situation. A representative from a partner company said, "Although only some suppliers have stopped deliveries so far, the contract with Homeplus, which used to be based on credit transactions, has now shifted to 'supplying products after confirming when and how much payment will be made.'" They defined the situation as, "If cash flow is not smooth, business operations could face problems at any time."