Homeplus has entered a de facto bankruptcy process following a court decision to terminate its rehabilitation proceedings, raising concerns about a broader economic impact that could surpass the recent TMON and WEMAKEPRICE crises. While the TMON crisis highlighted liquidity issues for sellers due to the collapse of online platform settlement systems, the Homeplus situation poses a more significant threat to employment, supply chains, and local economies due to the potential collapse of a major offline retail network.
On July 3, the government held a meeting at the Government Seoul Building, led by Lee Hyung-il, the First Vice Minister of the Ministry of Economy and Finance, to assess the implications of Homeplus's rehabilitation process termination. Representatives from various agencies, including the Ministry of Labor, the Ministry of SMEs and Startups, the Ministry of Trade, Industry and Energy, the Ministry of Planning and Budget, the Financial Services Commission, and the Financial Supervisory Service attended the meeting.
The Homeplus crisis is being compared to the TMON crisis that shook the retail industry in 2024. During the TMON crisis, the unsettled amount reached 1.279 trillion won, affecting 48,124 businesses. Although only 2.1% of the affected companies had unsettled amounts exceeding 100 million won, they accounted for 88.1% of the total losses, indicating a concentration of impact on a small number of sellers.
In response to the TMON crisis, the government provided 1.6 trillion won in financial support, including loans, interest subsidies, and maturity extensions, to mitigate seller losses. Subsequently, regulatory improvements were pursued, such as legalizing settlement cycles and managing payment amounts separately.
The impact of the Homeplus crisis is expected to be more complex. Large discount stores are not just sales channels; they are interconnected with employees, partner companies, suppliers, logistics, outsourced personnel for cleaning and parking, and local economies. While the online platform failures initially manifested as settlement payment issues, the offline large store failures are likely to spread through job losses and disruptions in local markets.
The employment impact is particularly immediate. As of the end of last month, Homeplus employed approximately 12,000 workers. Additionally, around 1,000 indirect workers involved in parking, cart management, and cleaning are also at risk of job loss. If store closures become a reality, regional employment impacts will be unavoidable.
The shock to the supply chain is also significant. About 150 small and medium-sized enterprises and small business owners that supplied goods to Homeplus are reportedly owed an average of 774 million won each in unpaid delivery fees. Concerns are rising that general commercial claims may be deprioritized in rehabilitation and bankruptcy proceedings, reducing the likelihood of recovery.
Moreover, the losses for investors in Homeplus-related bonds are estimated to reach 401.9 billion won. While the TMON crisis primarily affected sellers and consumers, the Homeplus crisis could escalate into a multifaceted crisis involving employees, partner companies, suppliers, investors, and local economies.
To support workers' livelihoods, the government plans to provide up to 21 million won in advance payments to employees affected by wage arrears. Additionally, a low-interest loan of up to 10 million won at an annual rate of 1.5% will be available within the scope of the arrears.
Low-income workers will also have access to living stability loans. Workers earning below 50% of the median income can receive up to 20 million won in living stability funds at an annual interest rate of 1.5%.
Emergency liquidity support totaling 440 billion won will be provided to small partner companies. This includes 90 billion won from the Small Enterprise and Market Service and the Small and Medium Business Administration, and 350 billion won in special guarantees from the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation.
The government plans to hold weekly meetings with relevant agencies to monitor the impact on workers and partner companies and assess the effectiveness of support measures. They will also consider additional measures to ensure that support is effectively implemented on the ground.
A government official stated, "Since the initiation of Homeplus's rehabilitation process, we have been monitoring the situation with relevant agencies and providing support to workers and partner companies. Moving forward, we will focus on protecting workers and small partner companies to minimize the economic impact of the termination of the rehabilitation process."
* This article has been translated by AI.
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