"Samdasoo, Steamed Buns, and Chum-Churum Gone"...Empty Shelves Everywhere, Homeplus Faces Collapse

Supply Suspended by Major Food Companies Following Samyang and Amorepacific
M&A Fails, Rehabilitation Plan Submission Extended, Management Normalization Remains Uncertain

Jeju Special Self-Governing Province Development Corporation has temporarily suspended the supply of its bottled water brand "Samdasoo" to Homeplus. SPC Samlip has also halted the supply of certain bread products, such as steamed buns, raising concerns about the departure of key partners.

According to the retail industry on December 8, major partner companies have been notifying Homeplus one after another of reduced orders and supply suspensions, spreading instability throughout the supply chain. As Homeplus has been under corporate rehabilitation proceedings (court receivership) for nine months and repeated disruptions in payment schedules have occurred, it is analyzed that anxiety among partners has come to the surface.

In fact, on the afternoon of December 7, at the Homeplus Gangseo branch in Deungchon-dong, Gangseo-gu, Seoul, a significant number of major products, including "Samdasoo," Binggrae ice cream (such as Bibibig), Lotte Chilsung’s "Chum-Churum," SPC Samlip bread, and Seoul Milk Cooperative cheese, had disappeared from the shelves. A representative from Jeju Development Corporation stated, "We are currently reviewing the overall situation at Homeplus," and added, "We are considering whether to continue supplying products, taking into account issues such as receivables." SPC Samlip also commented, "We have stopped supplying steamed buns to Homeplus," and "We are adjusting product supply in accordance with payment terms that meet our criteria."

It is known that Homeplus recently reduced its order volume for ice cream products significantly, as the inventory turnover period is long and winter is the off-season. Seoul Milk Cooperative is supplying only milk and some dairy products, while cheese supply has been reduced to a limited selection of items. Homeplus has acknowledged, "It is true that the supply of some products is not smooth."

On the afternoon of the 7th, around 5 PM, the shelves throughout the Homeplus Gangseo branch in Deungchon-dong, Gangseo-gu, Seoul were empty.

Empty Shelves Throughout the Store...Samdasoo, SPC Samlip Out of Stock

Previously, Samyang Foods suspended transactions with Homeplus on November 22 due to unpaid invoices. Although they plan to resume supply once normal trading conditions are met, the timing remains uncertain. Except for "MaepTaeng," which remained in stock, all Samyang ramen products are no longer being sold. Amorepacific also stopped supplying products in August due to delayed payments, and business has not resumed since then.

The conflict between Homeplus and its partners has persisted throughout the year. On March 4, Homeplus received court approval to begin rehabilitation proceedings from the Seoul Bankruptcy Court. Since then, major food companies such as Nongshim, Ottogi, Dong Suh Foods, and Lotte Chilsung halted deliveries, later resuming supply sequentially after adjusting conditions. In May, Maeil Dairies and Binggrae also suspended deliveries for the same reason, but normalized operations from June.

An industry insider explained, "After entering court receivership, Homeplus changed its payment settlement method, reducing the payment cycle from 30-40 days to 1-2 week intervals to lower uncertainty." Recently, a "prepayment before delivery" system has become the norm. Another source said, "Most companies have switched to a structure where they receive payment in advance before supplying products. While this has not caused problems, as Homeplus’s internal procedures are delayed, partners are strengthening their risk management."

Internal confusion at Homeplus is also deepening. One industry official noted, "Due to internal circumstances, there are frequent staff changes and slower decision-making, so event coordination and order adjustments are much more delayed than before. As the business situation worsens, some suppliers have seen their orders drop so much that sales have fallen to half of normal levels."

Considering Closure of Unprofitable Stores...Uncertainty Over Management Normalization

The problem is that there are no signs of improvement. Homeplus is pursuing a merger and acquisition (M&A) before its rehabilitation plan is approved, but no buyers have come forward. In the first public auction held on November 26, not a single bid was submitted. The company has extended the deadline for submitting its rehabilitation plan five times with court approval, and has now secured a new deadline until December 29. The court receivership period for Homeplus ends on March 3 next year.

Liquidity issues are also ongoing. Homeplus initially considered closing 15 stores by the end of the year, but Chairman Kim Byungjoo announced, "No stores will be closed until the M&A is completed," thus postponing the plan. However, as the financial situation has recently deteriorated, the company now says that the closure of some stores is unavoidable. In a statement released on December 2, the company said, "With the prolonged sale, our cash flow has reached its limit, so to avoid insolvency, we are considering suspending operations at some stores with large deficits." The targeted stores are the Gayang branch in Seoul, the Ilsan and Woncheon branches in Gyeonggi Province, the Jangnim branch in Busan, and the Buk-gu branch in Ulsan, all of which are scheduled to close on December 28. Last year, Homeplus recorded sales of 6.9919 trillion won and an operating loss of 314.1 billion won.

The food industry is closely monitoring the situation at Homeplus. One source said, "With sluggish domestic demand continuing, if Homeplus, the second-largest hypermarket, also falters, the burden on the entire market will inevitably increase. We are continuing to supply products while waiting for the M&A to succeed, but the outlook is so uncertain that it is difficult to let our guard down."