Homeplus has begun preparations to reopen 67 core stores on Aug. 1.
The retailer said on the 22nd that it will pursue business normalization and restructuring after the Seoul Bankruptcy Court reversed its decision to terminate rehabilitation proceedings and extended the rehabilitation period through Sept. 4.
The company plans to secure products in consultation with suppliers as soon as it receives 200 billion won in debtor-in-possession (DIP) financing. It aims to resume operations at the 67 temporarily closed stores from Aug. 1. However, the opening date for each store may vary depending on loan execution and product supply negotiations.
The company plans to adopt the operating model of U.S. retailer Trader Joe's, reorganizing its product lineup around food, private-brand (PB) products, and high-turnover daily necessities. It will also reduce the sales floor area of multi-story stores to about 1,000 pyeong and operate them primarily as single-floor outlets. Through this, the company plans to cut costs and improve operational efficiency. Trader Joe's makes up more than 80% of its products with PB items and mainly sells food and daily necessities in stores smaller than large discount marts.
Online operations will resume first at 16 stores in the Seoul metropolitan area that can operate immediately. After that, the company will consult with delivery firms to gradually expand the operating stores and delivery areas. It also plans to run mall operations centered on existing tenants in parallel.
The DIP loan will first be applied to costs necessary for store operations, including product payments, overdue rent, and electricity and water bills. The company also plans to pay overdue employee wages and unsettled amounts owed to small-business tenants.
Restructuring will also proceed quickly. Homeplus plans to close 37 non-core stores, which suspended operations on May 4, within the rehabilitation period. It will minimize the number of workers at headquarters and stores to cut costs, and employees excluded from work will remain on leave for the time being. During the remaining rehabilitation period, the company also plans to accelerate its sale process.
Earlier, the court decided on the 3rd to terminate Homeplus's rehabilitation proceedings, but reversed the termination decision on the 21st after Homeplus filed an immediate appeal and its major shareholder MBK Partners and largest creditor Meritz Financial Group agreed to a 200 billion won DIP loan.
Meanwhile, as its cash crunch continued, Homeplus said it sent a notice on the same day to those eligible for retirement settlements, once again suspending payment of retirement benefits and the company's portion of severance pay that had been scheduled for disbursement.
