'Financial Crisis' at Homeplus: Operations Halted at 7 Stores, January Salaries Delayed (Comprehensive)

Management Message to Employees on January 14
Seven Additional Stores to Suspend Operations
January Salary Payments Also Delayed
"Salaries Will Be Paid Immediately Once Emergency Funds Are Secured"

Homeplus has decided to suspend operations at seven additional stores due to worsening financial conditions and, following last month's partial salary payments, has also decided to delay this month's salary payments.

On January 14, Homeplus notified employees via a management message that it would suspend operations at seven stores: Munhwa, Busan Gamman, Ulsan Namgu, Jeonju Wansan, Hwaseong Dongtan, Cheonan, and Jochiwon.

Yonhap News Agency

Regarding the reason for the additional store closures, Homeplus stated, "Our financial situation, which has reached its limit, has not improved," and added, "We plan to guarantee employment for employees at the closed stores by transferring them to other locations."

Previously, after entering corporate rehabilitation proceedings and as its financial situation deteriorated, Homeplus decided in August last year to close 15 loss-making stores to improve cash flow, but postponed the closures on the condition of eased transaction terms. However, as the situation worsened due to delayed and halted deliveries, the company suspended operations last month at the Gayang, Jangnim, Ilsan, Woncheon, Ulsan Bukgu, Gyesan, Siheung, Ansan Gojan, Cheonan Sinbang, and Dongchon stores.

In a separate management message, Homeplus also announced a delay in January salary payments. The company stated, "We are doing our utmost to secure emergency operating funds to ensure that employee salaries are paid in full under any circumstances," but added, "However, since negotiations on the restructuring plan demanded by creditors, including union consent, have not been finalized, we have no choice but to delay the January salary payments." The company further explained, "Salaries will be paid as soon as emergency operating funds (DIP) are secured."

Last month, Homeplus also paid a portion of employee salaries on the original payday, the 19th, and distributed the remainder in installments four days later, on the 24th.

In response, Choi Cheolhan, Secretary General of the Homeplus branch of the Mart Workers’ Union, criticized, "Regardless of whether approval is granted, the company is pushing ahead with an unprecedented large-scale suspension of operations, effectively moving toward the dismantling of Homeplus."

He continued, "MBK is showing shameless behavior by deferring salary payments immediately after the arrest warrant for Chairman Kim Byungjoo was dismissed," and argued, "If MBK had simply guaranteed the DIP loan, the situation of unpaid wages amounting to approximately 50 billion won would not have occurred."