Homeplus Prioritizes Business Normalization and Successful M&A

Homeplus, which has recently overcome a bankruptcy crisis with court approval of its recovery plan, has made business normalization its top priority. The company aims to stabilize its 67 reopened stores quickly, reduce costs, and achieve profitability, while also seeking a suitable acquirer for a successful merger and acquisition (M&A) in the long term.
 
According to the retail industry on September 3, Homeplus management communicated to employees that "this approval decision allows the company to overcome the crisis and take a significant first step toward management normalization."
 
The management outlined key tasks for normalization, including stabilizing operations at the 67 stores, achieving profitability through cost reductions, and repaying debts as per the recovery plan. They emphasized, "Ultimately, we must find a suitable acquirer who can lead Homeplus to growth and successfully complete the M&A process."
 
Among the challenges, the management identified business normalization as the most pressing issue. They stated, "If we do not establish a solid foundation to generate surplus cash flow through our operations, all efforts will be in vain." This indicates the need to create a structure that allows the company to generate cash from its core business rather than relying solely on asset sales or additional borrowing.
 
Homeplus's business indicators are showing signs of recovery. After normalizing operations at the 67 stores on August 13, sales over the following 18 days reached 116.4 billion won, a 57% increase compared to the same period before the suspension.
 
During this time, the number of customers increased by 38%, and the number of purchasing members surged by 255%. However, since the reported figures include the effects of reopening, the sustainability of this recovery will need to be monitored further.
 
The company is also restructuring its cost structure. In the recent explanation of the recovery plan, Homeplus reported that it has reduced monthly rent by over 20 billion won and monthly labor costs by over 26 billion won. The plan involves consolidating unprofitable stores and focusing on profitable ones to improve operational cash flow.
 
However, many challenges remain. Homeplus must repay 503.2 billion won in unpaid supplier payments and other public debts. If the company fails to regain the trust of its suppliers, the stability of product supply could be jeopardized, impacting sales recovery.
 
To secure funding, Homeplus is also pursuing the sale of its assets. The company plans to sell 19 self-owned stores among those slated for closure by February 2028 and intends to pursue its own M&A while implementing the recovery plan.
 
On September 2, the Seoul Bankruptcy Court approved the recovery plan after receiving unanimous consent from 100% of secured creditors, 75.90% of unsecured creditors, and 100% of shareholders during a meeting of interested parties. Once repayments under the plan commence normally, the recovery process will conclude.
 
Management stated, "We will do our utmost to ensure that the dedicated efforts of our employees do not go to waste and that we successfully complete the recovery process," and requested continued support from all staff on the journey to normalization.