No Countermeasures from Management Amid Store Closure Fears
Tenant Store Owners' Association Holds Protest Rally
Union Voices Concerns Over Job Security... Criticism Intensifies
The deadline for Homeplus to submit its corporate rehabilitation plan to the court has been delayed by about a month from the original schedule. In response, both internal stakeholders and tenants (in-store businesses) operating within Homeplus stores have begun collective protests. This is due to growing concerns about whether they will be able to maintain employment and continue business operations, after Homeplus notified some stores?those facing difficulties in rent negotiations?of lease terminations.
In front of the MBK office in Gwanghwamun, Seoul, members of the Mart Industry Union Homeplus Branch held a press conference urging the normalization of Homeplus and shouted slogans. Photo by Yonhap News
The Homeplus Tenant Store Owners' Association and the Korea Federation of Micro Enterprises held a protest rally on May 26 in front of D Tower in Gwanghwamun, Seoul, where MBK Partners, the private equity fund (PEF) operator and major shareholder of Homeplus, is headquartered. They demanded responsible action from both MBK and Homeplus, and called for dialogue through a negotiation body.
They stated, "Since the abrupt filing for rehabilitation on March 4, the payment of sales settlement funds owed by Homeplus has been delayed, causing some store owners to experience arrears and confusion regarding basic operating expenses such as employee wages, food ingredient purchases, utility bills, and loan repayments." They continued, "Fearing a recurrence of this unstable situation, store owners have resorted to using personal payment terminals. However, Homeplus has sent a total of four certified notices by May 20, stating that 'using personal terminals is a contract violation' and that 'if sales proceeds are not deposited, the contract may be terminated.'"
They added, "This constitutes pressure and intimidation against store owners who have had no choice but to take desperate measures for survival." They also noted, "Some store owners have even received notices stating that their contracts will be terminated or renewal will be refused immediately upon court approval of the rehabilitation plan."
Tenant store owners operating in the 17 stores recently notified of lease termination by Homeplus are facing increasing confusion. It is estimated that there are approximately 200 to 300 stores within these locations. About half of these are directly operated by brand headquarters, while the other half are independent small business owners. The issue is that stores located within large discount marts like Homeplus are classified as special commercial zones and fall outside the protection of the Lease Protection Act. They are not guaranteed the right to request contract renewal for up to 10 years and cannot receive goodwill payments. If closure is confirmed, they must vacate within six months.
Previously, in a briefing released on May 16, Homeplus stated that if a store is closed due to failure to reach an agreement with the landlord, employees would be reassigned to nearby stores under the employment stability support system and receive a certain amount of encouragement payment. However, no measures were mentioned for the tenant store owners.
Homeplus has belatedly tried to reassure tenant store owners in the affected stores, asking them not to be anxious or worried and to wait as rent negotiations are still ongoing. However, store owners remain distrustful. The Tenant Store Owners' Association stated, "When a store owner facing closure inquired about the schedule for deposit refunds, they received the absurd response, 'Why are you making such a fuss?'" They added, "For store owners approaching contract renewal, Homeplus has instead notified them of fee increases, which are actions that defy common sense."
The Homeplus labor union has also intensified its criticism, calling the lease termination notices for some stores a "harbinger of corporate dismantlement." The Mart Industry Union Homeplus Branch pointed out, "Even in just the two stores in Cheonan, Chungnam, where termination was notified, the employment of about 170 people is affected." They continued, "The company plans to reassign them to four Homeplus Express (supermarket) locations in the area, but since one of these is a franchise, in reality only three locations are available for reassignment. Even then, each store employs fewer than 10 people, making it insufficient to accommodate the regular staff from large discount marts."
Currently, Homeplus is negotiating rent with 61 out of 68 leased stores, excluding seven stores operated by local governments or already confirmed for closure before the start of the rehabilitation process. Depending on the negotiation deadlines, Homeplus has notified 17 stores of lease termination, but states that discussions will continue to reach agreements, including with these stores. The deadline for submission of the investigator's report, which will determine whether the company continues or is liquidated, was originally May 21 but has been postponed to June 12 due to delays in rent negotiations. The deadline for submission of the rehabilitation plan has also been pushed back from June 12 to July 10.
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