SEOUL, September 15 (AJP) - South Korea’s retail industry is in crisis, with once-prominent chains flooding the market in search of new owners. Yet despite months of outreach, potential buyers are steering clear, leaving companies from hypermarkets to e-commerce platforms stuck in limbo.
Homeplus, one of the country’s largest hypermarket chains, has been searching for investors since March, when it entered restructuring to protect jobs and stabilize operations.
Despite months of outreach, not a single bidder has shown interest. The Seoul Bankruptcy Court has now extended the company’s deadline to submit a new restructuring plan, including its M&A strategy, until November 10.
Analysts say the lack of interest underscores the depth of the retail slump. Weak consumer spending, shrinking offline sales and fierce competition from Chinese e-commerce platforms like AliExpress and Temu are making acquisitions look too risky.
Speculation once centered on rivals E-Mart and Lotte Mart. But both chains have backed away, focusing instead on renovating existing stores and pushing into international markets. Lotte Mart has already reduced its domestic footprint from 125 locations in 2019 to 112 today.
E-commerce giant Coupang isn’t interested either, citing an incompatible business model. Another retail giant Nonghyup Agribusiness Group has denied any interest, pointing to mounting losses at its own retail subsidiaries.
With no rescue in sight, labor unions and civic groups are urging the government to intervene, warning that the fallout could hit jobs and local economies hard.
“This is not just a management issue,” Kim Dae-jong, professor of business administration at Sejong University, told AJP. “It’s a structural shift in offline retail that affects employment and entire regional economies. The government should create a social dialogue to find solutions.”
Even the once high-flying e-commerce sector is feeling the squeeze.
WeMakePrice, which collapsed into receivership last year after a payment and refund crisis, has been unable to find a buyer for over a year. Earlier this month, a Seoul court terminated its rehabilitation proceedings, leaving the company headed for liquidation. Interpark Commerce, also under restructuring, is still struggling to attract investors.
Analysts say the problem is structural: offline retail is shrinking while online growth slows under pressure from Chinese competitors. That combination has left distressed companies with few options.
“The appetite for risky takeovers just isn’t there,” said one retail executive. “Nobody wants to inherit these problems.”
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