The Homeplus headquarters in Gangseo-gu, Seoul, is closed on July 3. [Photo: Yonhap News]
Homeplus, the second-largest discount retailer in South Korea, is facing a bankruptcy crisis following a court decision to terminate its restructuring process, which has significant implications for its partner companies and employees.
On July 3, the Seoul Bankruptcy Court ruled to end Homeplus's corporate rehabilitation process, which began in March 2025. The court determined that the revised rehabilitation plan submitted by Homeplus on June 30 was unlikely to be executed. The company needs at least 200 billion won (approximately $150 million) in operational funds to stabilize its operations, but it has not secured this amount to date.
However, this ruling does not confirm bankruptcy. Homeplus can file an immediate appeal within 14 days of the decision. If it secures funding during this period, there remains a possibility for the rehabilitation process to resume. Homeplus has requested a loan of 200 billion won from its largest creditor, Meritz Financial Group.
Partner companies supplying goods and services to Homeplus are closely monitoring the court's decision. There are 4,603 partner companies, with 47% relying on Homeplus for more than half of their revenue.
Homeplus has historically sold around 3 trillion won (approximately $2.25 billion) worth of agricultural, livestock, and seafood products annually, with domestic sales accounting for 1.9 trillion won (about $1.4 billion). If Homeplus shuts down, it would disrupt the supply chains of many small vendors.
The impact of delayed payments has already been significant. A recent survey by the Korea Federation of Small and Medium Enterprises revealed that 76.7% of small suppliers to Homeplus are experiencing operational difficulties due to payment delays. The average unpaid amount owed to these suppliers is approximately 774 million won (about $580,000). Furthermore, 40.7% of responding companies reported unpaid amounts exceeding 500 million won, while 24.0% indicated they were owed over 1 billion won.
Employees are also facing the threat of mass layoffs. As of the end of last month, Homeplus employed about 12,000 people. Including 1,000 indirect workers involved in parking, cart management, and cleaning, the potential employment impact could be even greater.
In response, the government has initiated emergency support measures. It plans to provide up to 21 million won (about $15,700) in wage arrears payments to affected workers and offer low-interest loans of up to 10 million won (approximately $7,500) at a 1.5% interest rate for living expenses. Additionally, low-income workers earning below 50% of the median income will be eligible for loans of up to 20 million won at the same interest rate.
A total of 440 billion won (around $330 million) in emergency liquidity will be provided to small partner companies. This includes 90 billion won from the Small Enterprise and Market Service and 350 billion won from special guarantees by the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation. The support limit for small businesses will increase from 70 million won to 100 million won, with interest rates reduced by 0.5 percentage points.
Following the court's decision, Homeplus issued a statement expressing its commitment to cooperate with legal proceedings and minimize the impact on creditors and employees. The company also extended sincere apologies to customers, employees, and partner companies.