Homeplus temporarily closes 37 stores until July 3 [Graphic=Ajou Economics]
On May 18, at the Homeplus store in Jamsil, Songpa District, Seoul, the cart storage area was empty, and a sign reading "Hygienic Homeplus Carts" was torn and fluttering in the wind. The usually bustling store was quiet following the closure announcement. Tenants operating within the store expressed their frustration, with one restaurant owner, identified as A, stating, "Since the supermarket closed, the few customers we had have noticeably decreased."
As of July 3, Homeplus has temporarily closed 37 stores nationwide, significantly impacting the tenants. While some restaurants and photo studios remain open, customers perceive the entire store as closed, leading to a sharp decline in foot traffic.
A, the restaurant owner, reported, "Since the store's closure, our sales have dropped by about half." Other tenants echoed similar sentiments. Another tenant, B, sighed, saying, "We are still operating, but if foot traffic disappears, closing is just a matter of time."
A torn sign flutters in the wind at the cart storage area of Homeplus in Jamsil. [Photo=Hong Seung-wan]
Kim Byeong-guk, president of the Homeplus Tenant Association, stated, "Although the leased stores are said to be operating normally, in reality, it is almost like being closed. Customers already perceive that the entire Homeplus store is shut down."
Many customers were unaware that some leased stores were still open. A 30-something visitor, Park, remarked, "I assumed Homeplus was closed when I heard about the shutdown. I only realized some stores were still operating after seeing a few people coming in and out."
The food section at Homeplus in Jamsil is dark, and a white cloth blocks the entrance. [Photo=Hong Seung-wan]
The uncertainty surrounding the reopening of the stores adds to the tenants' concerns. Homeplus has announced the temporary closure of 37 stores until July 3, but if funding issues persist, the closure could be extended. A Homeplus representative stated, "Currently, if we cannot secure liquidity due to internal and external conditions, it will be difficult to proceed."
Leased store owners are bearing the financial losses from the temporary closure. However, Homeplus has reportedly not established a separate compensation plan, citing that leased stores can continue operating. An industry insider noted, "Shopping involves not just products but also the store atmosphere, layout, and customer experience. If the main store is closed, it will be challenging to attract customers to the leased stores, leading to greater losses for them."
Meanwhile, Homeplus is seeking bridge loans and emergency operational funding from its largest creditor, Meritz Financial Group, as part of its restructuring efforts. However, negotiations have stalled due to significant differences over loan conditions.
Meritz has recently indicated it may consider a short-term operational loan of 100 billion won for 2-3 months, but has set conditions including immediate repayment upon the sale of Homeplus Express, an annual interest rate of 6%, and personal guarantees from major shareholders and management. However, Homeplus has expressed difficulty in accepting these terms, as the sale of Homeplus Express is already contracted to conclude by the end of June, meaning the actual loan period would only be about a month.
