Homeplus Continues Store Closures ... Gyeongnam Mart Union Urges Government Action

As Homeplus, currently undergoing corporate rehabilitation proceedings, recently decided to close 15 stores where rent negotiations had stalled, workers in the Gyeongnam region have called on the government to come up with solutions at the national level.

The Gyeongnam Headquarters of the Mart Industry Labor Union under the Korean Confederation of Trade Unions Service Federation, representing Homeplus mart workers, held a press conference at the Gyeongnam Provincial Government Press Center on August 19. They stated, "The Homeplus store closure crisis is not merely a corporate crisis or a matter of restructuring, but a social crisis that threatens the entire regional economy. The government must intervene immediately."

The Gyeongnam Headquarters of the Mart Industry Labor Union under the Korean Confederation of Trade Unions Service Federation is holding a press conference urging the halt of Homeplus store closures and the establishment of government-level solutions. Photo by Lee Seryung

The Gyeongnam Headquarters of the Mart Labor Union argued, "MBK, the major shareholder, said it would find a buyer by the end of August, but with the deadline approaching, they have decided to close 15 stores. This shows a lack of sincerity in the merger and acquisition process and reveals an intention to gradually liquidate Homeplus."

They continued, "There are warnings that the closure of a single store could result in 945 directly and indirectly employed workers and 7,898 local business district workers losing their jobs, an annual economic loss of 270 billion won, and local housing prices dropping by up to 34 percent. Such damage would be a disaster for both local residents and consumers."

Kang Sunyoung, head of the Gyeongnam Headquarters, said, "Although the decision to close stores is currently being attributed to failed rent negotiations, it is likely that more stores will be closed soon under the pretext of operating losses, and even company-owned stores may be sold off for operating funds. The government must act immediately before the regional economy collapses."

The union demanded the following: the establishment of a government-led social dialogue body, the immediate holding of a hearing on MBK, the arrest and investigation of MBK Chairman Kim Byungjoo, and the suspension of store closures by MBK.

In addition, they plan to stage a sit-in protest in front of the Gyeongnam Provincial Government for six days starting September 8, and to hold a nationwide simultaneous rally on September 13.

According to the union, there are a total of 18 Homeplus stores in Gyeongnam, including 8 large stores and 10 Express stores, and it is estimated that there are about 1,000 directly employed regular staff.

A union official stated, "There are currently no stores in Gyeongnam facing imminent closure, and the recently expired contracts for the Jinju and Samcheonpo stores have been renewed. However, we do not know when they might be targeted for closure. Even if contracts are renewed, store operations can only continue if the company survives."

The official also emphasized, "If a preferred bidder does not emerge by the end of this month, the sale of Homeplus will fall through. Active government intervention is necessary."

Due to worsening liquidity, Homeplus entered corporate rehabilitation proceedings in March this year. Last month, the company obtained court approval to pursue a merger and acquisition before the rehabilitation plan is finalized, and is currently seeking a buyer.

In the meantime, Homeplus negotiated rent reductions for 68 leased stores nationwide. However, for 15 stores where no progress was made, the company recently decided to close them sequentially.

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.

Additionally, starting September 1, all headquarters employees will be offered unpaid leave on a voluntary basis, and the partial return of executive salaries, which has been in place since March, will be extended until the company successfully completes rehabilitation.