Homeplus Co. store in Seoul. (Image courtesy of Yonhap)
SEOUL, Sept. 3 (Korea Bizwire) — South Korea’s major discount store chain Homeplus Co. said Wednesday it will close 15 stores by December while cutting operating hours at others as part of belt-tightening efforts by the ailing retail company.
Under the plan, Homeplus will shut five locations in mid-November and 10 others in December, the company said in a notice sent to employees.
Sixty-eight stores that had operated until 11 p.m. or midnight will also close at 10 p.m.
The chain operator said the 15 stores subject to restructuring posted a combined annual loss of 80 billion won (US$57.4 million), with their rents amounting to 70 billion won.
Homeplus has been under a court-led rehabilitation program since March, when two local credit rating agencies downgraded its corporate bonds from A3 to A3-, citing poor financial health. The company is required to submit its rehabilitation plan to the Seoul Bankruptcy Court by next Wednesday.
Unionized workers of Homeplus, meanwhile, staged a protest near the presidential office in central Seoul on the day, calling for the government to take a more proactive role in normalizing the supermarket chain.
“The merger and acquisition led by MBK Partners has failed, as it did not find new potential buyers even until last month,” the union said. “If the rehabilitation program leads to corporate liquidation, it will negatively impact the regional economy.”
MBK Partners acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won (US$5.16 billion).
(Yonhap)
