Unpaid Leave for Employees and Executive Salary Reductions Implemented
Union Claims "Unilateral Closure Notice" and Requests Government Support
Homeplus has announced that it will begin the sequential closure of 15 stores where there has been no progress in rent adjustment negotiations, entering a company-wide emergency survival management system. The company cited the lack of improvement in its business environment and increasing financial pressure, even five months after the commencement of rehabilitation proceedings, as the reasons for this decision. The Homeplus labor union, however, is pushing back, claiming that MBK is laying the groundwork for liquidation.
According to Homeplus on August 13, the company will proceed with the sequential closure of 15 out of its 68 leased stores where rent adjustment negotiations have stalled. The affected stores are Siheung, Gayang, Ilsan, Gyesan, Ansan Gojan, Suwon Woncheon, Hwaseong Dongtan, Cheonan Sinbang, Munhwa, Jeonju Wansan, Dongchon, Jangnim, Busan Gamman, Ulsan Buk-gu, and Ulsan Nam-gu.
The store closures are part of Homeplus's implementation of strong self-rescue measures. These include: sequential closure of the 15 stores where rent adjustment negotiations have not progressed; the introduction of an unpaid leave system for headquarters employees starting September 1; and the partial return of executive salaries, a policy that has been in place since the rehabilitation proceedings began in March. Homeplus plans to continue these measures until a pre-approval merger and acquisition (M&A) is successfully completed.
Homeplus explained that, even five months after the start of rehabilitation, its financial situation has not shown clear improvement. As trust in the company has declined, some major suppliers have shortened settlement cycles, reduced transaction limits, and increasingly demanded advance payments and new security deposits, all of which have worsened cash flow. The decline in sales was further exacerbated in July when large supermarkets were excluded from the list of eligible venues for the national cost-of-living support payments.
Jo Jooyeon, Co-CEO of Homeplus, sent a message to all employees on this day, stating, "If the current situation continues, even rehabilitation through a pre-approval M&A could be in jeopardy-this is an existential crisis. We can no longer delay and have entered a final survival management phase."
In response, the Homeplus labor union argued that this unilateral notification clearly reflects MBK's intention to "cut and run." Ahn Sooyong, head of the Homeplus branch of the Mart Industry Union, said, "When the situation becomes difficult, MBK should take responsibility and increase its investment, but instead, they are closing stores for various reasons. In the end, there will be hardly any stores left, and the company will be liquidated," he emphasized.
The union also added that a government-led dialogue body should be established to resolve the issue. Ahn stated, "The union is not insisting that every store must be saved. Rather, we should pursue discussions through a social dialogue platform so that everyone can survive." The Homeplus union plans to hold a press conference regarding the company's shift to emergency management at 2 p.m. on August 14 at the National Assembly Communication Center.
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