The Homeplus Mart Union accused MBK Partners, the private equity firm that owns Homeplus, of prioritizing dividends for fund investors over the company’s long-term prospects. (Image courtesy of the Homeplus Mart Union)
SEOUL, Jul. 18 (Korea Bizwire) – Homeplus, a major South Korean retailer, has announced the closure of two stores, sparking protests from its labor union over what it sees as a broader trend of store closures and asset liquidation.
According to industry sources on July 17, Homeplus informed employees through its internal network that it would be closing its Ansan Seonbu store in Gyeonggi Province and Dongcheongju store in North Chungcheong Province due to the expiration of their lease agreements.
The company cited prolonged poor performance and accumulated operating losses as reasons for the closures.
The Ansan Seonbu store will continue operations until the end of next year, while the Dongcheongju store will remain open until the first half of 2026.
Homeplus has assured employees that all staff from these stores will be guaranteed employment and relocated to nearby locations where possible.
The Homeplus Mart Union, however, has voiced strong opposition to these closures. In a statement, the union claimed that the Dongcheongju store is not among the lowest-performing outlets in terms of sales.
They accused MBK Partners, the private equity firm that owns Homeplus, of prioritizing dividends for fund investors over the company’s long-term prospects.
According to the union, management has already notified employees of plans to close or liquidate assets for a total of 11 stores due to lease expirations. The union expressed concern that if Homeplus continues to downsize through store closures, it could lead to mass unemployment.
The union also criticized the company’s lack of specificity regarding plans for maintaining operations or re-entering locations after store sales, stating that “MBK is tearing Homeplus apart.”
The Homeplus Mart Union has voiced strong opposition to the closures. (Image courtesy of the Homeplus Mart Union)
This year alone, four Homeplus stores across the country are set to close. Two stores in Busan and Seoul have already shut down, with two more in Daejeon and Anyang scheduled to close by the end of August.
Employees fear that MBK Partners is pursuing an exit strategy, having recently put up for sale around 310 Homeplus Express supermarket locations. They worry that the company will continue to close leased large-format stores and sell off owned properties.
MBK Partners acquired Homeplus in September 2015 for 7.2 trillion won, using a combination of blind fund investments and loans. Since then, MBK has sold off about 20 Homeplus stores to repay nearly 4 trillion won in debt.
The union is calling on MBK and Homeplus management to prioritize the company’s sustainability and employee job security over short-term profits. They are also urging the government to closely investigate Homeplus’s management situation and intervene if necessary to protect citizens’ livelihoods.
Homeplus employees are actively protesting against the potential split sale of the supermarket division, arguing that it would result in a loss of competitiveness.
The union has scheduled a parliamentary discussion forum for July 25 to address concerns over MBK’s handling of Homeplus and to explore sustainable alternatives.
Ashley Song (ashley@koreabizwire.com)
