Homeplus, which was on the brink of bankruptcy, has narrowly secured an opportunity for rehabilitation. After entering corporate rehabilitation procedures in March of last year, a legal foundation for management normalization has been established after 18 months.
However, this decision does not mean that Homeplus has fully recovered. It is more accurate to say that the company has received a final chance to revive.
The most urgent task is to restore its damaged operational foundation. The competitiveness of the retail industry ultimately stems from its products. As financial difficulties have persisted, some suppliers have tightened trading conditions or reduced product supply, leading to a vicious cycle of declining sales. If a large supermarket cannot provide the desired products on time, there is no reason for customers to return. This is why restoring trust with suppliers and normalizing the supply chain must be the first priority following the approval of the rehabilitation plan.
The starting point for this is to properly repay overdue supply payments. Homeplus has over 500 billion won in commercial public claims, which are supply payments. The rehabilitation plan includes a proposal for long-term installment repayments. However, while waiting for several years may be part of a financial plan for large corporations, it can become a matter of survival for smaller suppliers.
Asset sales must also be expedited. According to the rehabilitation plan, Homeplus needs to sell its stores and other assets to use the proceeds for debt repayment. The challenge lies in whether it can sell these assets at the planned prices and times, considering the real estate market and the outlook for large supermarket operations. Delays in sales or lower-than-expected prices could jeopardize both debt repayment and the securing of operating funds.
Ultimately, the success of the rehabilitation hinges on whether Homeplus can return to being a 'company that makes money through operations.' With e-commerce platforms like Coupang becoming central to the retail market and competition among large supermarkets intensifying, merely reverting to the old Homeplus will not suffice. The company must decisively restructure underperforming stores and high-cost structures while rebuilding its unique competitiveness in fresh products, private brands, and online delivery.
Finding a new owner is also an urgent task that cannot be postponed. Homeplus management has stated that immediately after the approval of the rehabilitation plan, they will focus on normalizing operations, achieving profitability, repaying debts, and ultimately finding a suitable acquirer to complete a merger and acquisition. Given the current situation, it is a significant burden for Homeplus to manage both investment and debt repayment solely through its own cash generation.
Throughout the rehabilitation process, creditors, suppliers, and employees have already endured considerable hardship. Under the pretext of saving the company, it is unacceptable to demand further sacrifices from cooperating firms and employees. Existing major shareholders and management must also take responsibility commensurate with their financial support and management normalization efforts.
The government and financial sectors should not view Homeplus as just a single corporate issue. Homeplus is connected to numerous workers, suppliers, and small businesses. If it collapses, the shock could ripple beyond the retail sector into the financial industry and local economies. However, unconditional support is not the solution either.
With the approval of the rehabilitation plan, Homeplus has extinguished the immediate threat of bankruptcy. However, the court can revoke the rehabilitation process and declare bankruptcy if the repayment is not executed as planned. What Homeplus must do now is clear: repay its debts, restore trust with suppliers, and normalize its stores to attract customers again. The approval of the rehabilitation plan is not the end but the beginning. If it fails to seize this hard-won final opportunity, both the market and creditors may not be willing to wait again.
* This article has been translated by AI.
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