First Payday Since Rehabilitation Proceedings Began on the 21st
Disagreements Over Delivery Terms With Some Partners Continue
Tenant Store Owners Also Raise Issues With Settlement Method
Attention Focused on Stability After March Discount Events
Homeplus has entered its third week of corporate rehabilitation proceedings, but confusion shows no signs of subsiding. Although the salaries for this month, which workers had been concerned about, were paid normally, the labor union continues to raise criticism, fearing restructuring and the sale of business sites. Additionally, some partner companies are taking a confrontational stance by proposing different trading conditions due to concerns about payment settlements, causing confusion over the company's policy to repay all claims through normal business operations.
20,000 Direct Employees Receive Salaries... Differences in Views on the Background of Rehabilitation Application
According to the Homeplus branch of the Mart Industry Labor Union on the 21st, Homeplus paid the salaries of 20,000 direct employees normally on the first payday since the start of the rehabilitation process. Initially, there were concerns among Homeplus members that salary settlements would be delayed due to the rehabilitation process, and in the worst case, that severance pay might not be received.
However, the labor union rebutted that the difficulties in the offline market, which the company cited as the reason for applying for rehabilitation, differ from the facts. According to the Democratic Party's Euljiro Committee (Chairman Min Byeongdeok) and the Homeplus Task Force (TF), Homeplus cited in its rehabilitation application submitted to the Seoul Bankruptcy Court the sharp short-term increase in minimum wage, sales decline due to COVID-19, and the shift to online retail due to the spread of e-commerce as causes for the decrease in operating profit.
On the other hand, the labor union points out that the store restructuring carried out by MBK Partners, a private equity fund (PEF) operator and major shareholder of Homeplus, after acquiring the company in 2015 triggered the deterioration of performance. The union emphasized, "Since MBK's acquisition, the number of self-operated stores decreased from 89 to 56, while the number of leased stores increased from 53 to 70," adding, "The increase in rent expenses worsened profitability, which was the main cause of the decline in operating profit." An Su-yong, head of the Homeplus branch of the Mart Labor Union, said, "Homeplus employees are threatened in their right to livelihood amid employment insecurity," and argued, "To save Homeplus, practical rehabilitation measures should be sought, not speculative capital MBK."
Concerns Over Unsettled Payments... Possibility of Repeated Prepayments and Supply Suspensions
Homeplus has stated its intention to prioritize small and micro businesses by properly repaying trade claims such as partner company delivery payments and tenant settlement funds, and to repay all claims, including those of large corporate partners, without problems. This strategy is based on normal business activities, including product supply within stores, aiming to "earn and repay." For this reason, starting with the 28th anniversary solo super sale "Homellun Is Back" this month, Homeplus has been securing cash through three consecutive weeks of encore discount events.
On the other hand, some manufacturers, including food companies, are demanding prepayments and shorter settlement cycles, causing difficulties by suspending deliveries or resuming them through negotiations. For example, Seoul Milk temporarily suspended product supply to Homeplus from the previous day and has not yet decided on resuming deliveries. A Seoul Milk official said, "We are requesting to shorten the existing payment settlement cycle and to pay in advance, but no agreement has been reached with Homeplus," adding, "We plan to resume deliveries once a compromise is found through continued negotiations."
Homeplus stated, "Seoul Milk is requesting cash prepayment for product payments, but it is not possible to accept this due to fairness with other partners and tenants," and added, "We will explain this well to gain understanding and aim to reach an agreement as soon as possible." However, if the settlement for product sales in February, which must be paid by the end of this month, is not properly made, there is a possibility that manufacturers' demands for prepayments and delivery suspensions will be repeated.
Democratic Party of Korea Euljiro Committee member, Progressive Party member Jeong Hye-gyeong, and Innovation Party member Shin Jang-sik held a joint press conference on the 19th at the National Assembly Communication Office proposing a joint countermeasure committee to guarantee the survival rights of workers and tenant companies related to the Homeplus incident. Photo by Yonhap News
Political Circles and Authorities Increase Pressure
There are also criticisms that there are problems in the trading relationships with tenants operating in Homeplus stores. Earlier, on the 18th, Democratic Party lawmaker Kim Nam-geun, a member of the National Assembly's Judiciary Committee, pointed out illegal elements in Homeplus's so-called 'rental-eul' transactions with small and medium-sized merchants during a related inquiry on the Homeplus situation. Unlike transactions with large corporations, Homeplus reportedly receives the entire sales amount from small and medium merchants, holds it for about 30 to 60 days, and then deducts rent and other fees before returning the balance.
Tenant contracts in large marts are divided into 'rental-gap,' where a fixed monthly rent is paid, and 'rental-eul,' where commissions and management fees are deducted from sales before payment. Homeplus is known to have a significantly higher proportion of rental-eul contracts compared to competitors. Many rental store owners complain that they suffered damages because they did not receive January settlement payments due to delays caused by Homeplus's rehabilitation process. Therefore, they are requesting to use their own point-of-sale (POS) systems instead of the calculator devices provided by Homeplus to immediately secure sales proceeds.
Homeplus said, "Except for large corporations and some brand store owners, delayed payments to almost all tenants have been completed, and operations are currently normal," and requested, "To prevent misunderstandings during the settlement process, please use the company's POS rather than personal POS." They added, "We are also reviewing measures to alleviate the anxiety of tenants who fear payment delays might recur."
On the other hand, lawmaker Kim said, "Although there is an obligation to deposit the entire sales amount in advance, small and medium merchants can refuse this under the Civil Act's 'defense of insecurity' clause due to Homeplus's deteriorated creditworthiness," and argued, "Nevertheless, Homeplus's insistence on full sales deposits constitutes an abuse of superior position and requires investigation."
In response, Han Ki-jung, chairman of the Fair Trade Commission, said, "We will fundamentally consider improving the rental-eul system so that sales can be recognized and received without prioritizing the receipt of sales proceeds." Additionally, the Financial Supervisory Service has established a 'Homeplus Situation Response TF' and plans to operate four teams for unfair trade investigations, inspections, accounting audits, and financial stability support to investigate allegations raised up to the rehabilitation process, increasing pressure.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
