Homeplus Resumes Operations at 67 Stores Amid Restructuring Efforts

Homeplus is set to restart operations after securing 200 billion won in emergency operating funds (DIP). The company plans to reopen 67 large stores nationwide that have been temporarily closed, following a court decision to reverse the termination of its rehabilitation process.

On July 22, Homeplus issued a statement saying, "The Seoul Rehabilitation Court has canceled the decision to terminate the rehabilitation process and has decided to extend it until September 4, allowing us to focus on normalizing operations and restructuring."

The company intends to reopen the 67 stores, which had halted operations since July 13, as soon as the DIP funds are available. Initially, it will prioritize the sale of food and essential goods, which have high sales volumes and turnover rates, to quickly improve cash flow.

In the online sector, operations will begin with 16 stores in the metropolitan area that are ready to operate, gradually expanding delivery areas through discussions with delivery partners.

The store operation model will also change. Some stores that were previously multi-level will be converted to single-level layouts of approximately 1,000 square meters, focusing on food, private label (PB) products, and high-turnover essential goods.

A Homeplus representative explained, "This business model is similar to that of Trader Joe's, a leading U.S. retailer, and is a strategic response necessary for Homeplus's recovery and normalization amid competition with e-commerce companies." Trader Joe's supermarkets consist of over 80% private label products.

The DIP funds are expected to be primarily used for essential operating expenses, including payments for goods, overdue rent, and utility costs such as electricity and water. The company also plans to pay overdue employee wages and settle outstanding payments to small business partners. However, Homeplus notified employees that the payment of retirement benefits, originally scheduled for today, has been postponed due to a lack of funds.

Previously, on July 20, Homeplus management held an emergency meeting to discuss plans for reopening stores following the court's decision to appeal the termination of the rehabilitation process. The initial inventory levels will be only about half of what they were during normal operations, including fresh and processed foods and essential grocery items, but the company remains committed to resuming operations.

Meanwhile, the court has extended the deadline for Homeplus's rehabilitation plan approval until September 4. Considering that Homeplus entered the rehabilitation process on March 4 of last year, this is effectively the last extension.