The nationwide shutdown marks the dramatic end of a company that once challenged E-mart for industry leadership and highlights the collision of three powerful forces reshaping the country's economy: the relentless rise of e-commerce, the long shadow cast by debt-fueled private-equity ownership and a bankruptcy system that often leaves workers and small businesses paying the highest price.
Homeplus said it had exhausted the funds needed not only to purchase merchandise but also to pay electricity bills and other basic operating expenses, forcing it to suspend operations at its headquarters and all remaining hypermarkets.
"Our operating funds are completely depleted, leaving us unable to cover merchandise payments or even the utility costs and other running expenses needed to keep stores open," the company said in a statement.
Although tenants operating inside Homeplus shopping malls may continue trading independently if they choose, the closure effectively ends normal retail operations while the company waits to decide whether to appeal a court ruling that terminated its rehabilitation proceedings.
The shutdown follows a Seoul court's July 3 decision to end Homeplus' corporate rehabilitation.
The court left a narrow path for revival, saying it would reconsider if the retailer secured a 200 billion won ($133.9 million) emergency loan by the July 20 appeal deadline. With neither new financing nor a strategic investor emerging, that prospect has faded rapidly.
Only two months ago, Homeplus still operated 67 stores after shutting 37 of its 104 outlets. Over the weekend, desperate clearance sales offering discounts of more than 50 percent drew long checkout lines but failed to generate enough cash to change the company's fortunes.
Whatever hope remained disappeared Tuesday morning when MBK Partners abruptly canceled scheduled talks with Homeplus' labor union only hours before the first face-to-face meeting since the shutdown.
Union leaders had planned to press MBK Vice Chairman Kim Kwang-il to provide emergency funding and support an appeal against the court's ruling.
Instead, workers accused the buyout firm of abandoning both the retailer and its employees.
"We still want to see Homeplus put back on its feet, and the best outcome would be a new owner through a fresh merger or acquisition," said Choi Cheol-han, general secretary of the Homeplus branch of the Korea Mart Labor Union.
"For that to happen, extending the rehabilitation process beyond next week's deadline is absolutely essential."
The union vowed to intensify protests after the canceled meeting.
"An arrest warrant for MBK Chairman Kim Byung-ju and Vice Chairman Kim Kwang-il was sought once and dismissed, but we believe prosecutors should seek one again," Choi said.
"Most importantly, the government needs to regulate leveraged buyouts more actively so other companies do not suffer the same fate."
On Monday, union members rallied outside the former presidential compound in central Seoul, where one union leader attempted to approach the gates before police restrained him. Protesters accused the government of allowing speculative capital to destroy one of the country's largest retailers while standing aside.
"The government says it will spend 500 billion won or even 1 trillion won after Homeplus is liquidated," Choi said.
"But you should be paying for treatment while the patient is alive, not covering the funeral costs after death."
Employees are not the only victims.
About 100 tenant merchants operating inside Homeplus shopping malls plan to stage their own protest Wednesday, arguing they had no role in decisions made by MBK Partners, Homeplus or creditors but now risk losing businesses built over decades.
"We're different from the union. We invested our own money," a spokesperson for the National Association of Homeplus Tenant Merchants told AJP.
"We had no say in the decisions made among MBK, Homeplus and Meritz, yet we may lose our livelihoods, which for many of us represent our life's savings."
Many tenants said they still hope a new owner emerges rather than liquidation.
"The company that exploited loopholes in the law bears responsibility," the spokesperson said.
"But those who allowed those loopholes to exist also have responsibility. That's why we're protesting."
From Samsung-Tesco success to private-equity casualty
Homeplus' collapse began long before this year's cash crisis.
The retailer started life in 1997 as Samsung C&T's retail business, opening its first hypermarket in Daegu before forming a joint venture with Britain's Tesco in 1999.
The partnership transformed Homeplus into one of Korea's largest discount chains, competing head-to-head with Shinsegae's E-mart during the peak years of the hypermarket boom. At its height, the company operated roughly 140 stores nationwide.
Everything changed in 2015.
Struggling with financial problems at home, Tesco sold Homeplus to MBK Partners for approximately 7.2 trillion won, then the largest merger-and-acquisition deal in South Korean history.
What was once celebrated as a landmark private-equity transaction has increasingly become a cautionary tale.
Critics argue the debt used to finance the acquisition forced Homeplus into years of asset disposals just as Korean consumers shifted rapidly toward online shopping. While rivals invested heavily in digital platforms, logistics and store renovations, Homeplus was selling prime properties and using proceeds to reduce debt.
By the time e-commerce permanently reshaped Korean retail, the company no longer had sufficient capital to reinvent itself.
If Homeplus ultimately files for bankruptcy rather than reviving rehabilitation, the consequences will extend far beyond employees.
Under Korean insolvency law, a court-appointed receiver would liquidate company assets and distribute proceeds according to legal priority.
Secured creditors would be repaid first.
That hierarchy leaves many suppliers, particularly smaller businesses, facing potentially severe losses.
Meritz Financial Group and other lenders hold collateral over many of Homeplus' properties, including roughly 1.3 trillion won in senior secured loans.
Industry estimates suggest around 40 percent of Homeplus' roughly 800 suppliers are each owed more than 500 million won, with average exposure approaching 770 million won.
Unlike rehabilitation, where unpaid invoices might eventually be recovered through continued business operations, bankruptcy would leave suppliers relying entirely on proceeds from asset sales after secured lenders are paid.
Homeplus also owns approximately 62 store properties outright.
If they are sold simultaneously, they could significantly increase supply in Korea's already sluggish commercial real estate market.
"The unpaid bills owed to tenant businesses will become a very serious issue," said Jung Heung-jun, a professor specializing in labor relations at Seoul National University of Science and Technology.
"The situation for employees may not be much easier either. Judging by MBK's conduct so far, I don't expect it to voluntarily assume moral responsibility beyond whatever legal obligations exist."
"The prime properties have already largely been sold. Even if remaining stores are eventually acquired by companies such as E-mart or Lotte Mart, it's doubtful that would fully cover workers' wage claims."
"MBK had opportunities to restore Homeplus' health," Jung said.
"It is difficult to imagine the firm now accepting responsibility for preserving jobs at its own expense."
Why Homeplus matters
The collapse of Homeplus represents more than the failure of another retailer.
Meanwhile, the retail landscape has fundamentally changed.
South Korea's online shopping market expanded to roughly 271 trillion won in 2025, with Coupang and Naver dominating grocery delivery and everyday consumer spending.
E-mart and Lotte Mart survived by investing in private-label products, experiential retailing, omnichannel strategies and digital integration.
Homeplus, burdened by acquisition debt and years of asset sales, lacked both the capital and the time to make the same transformation.
The company said it will monitor developments until the July 20 appeal deadline before deciding whether to seek another chance at rehabilitation.
Yet with MBK Partners and creditor Meritz Financial Group deadlocked over fresh financing, workers and merchants protesting in the streets, and confidence evaporating among suppliers, few industry observers believe the retailer can be revived in its current form.
Even if a new owner eventually emerges, they say, Homeplus is unlikely ever again to become the national retail powerhouse that once stood shoulder to shoulder with E-mart.
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