Homeplus's Oldest Store Faces Closure

On the 24th, at a Homeplus store in Gyeonggi Province. Descending to the basement parking lot through the narrow and old entrance of the eight-story building, there were only about 20 cars parked in the spacious lot. Although it was a weekend afternoon, typically the busiest time for customers, the atmosphere was quiet except for the Daiso store located on the first floor, which had some visitors. Even in the main food section, there were few customers shopping. On a display stand that once appeared to hold seafood, dishes and plates were now being sold instead, contrary to the signage.

A Homeplus store in Gyeonggi-do scheduled to close next year. The store interior is quiet even on holidays due to the lack of customers. Photo by Kim Heungsun

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Opened in 1996, this location is the oldest among all currently operating Homeplus stores, including its predecessor Carrefour. It is set to close next year, marking its 30th anniversary. Homeplus, which has entered corporate rehabilitation proceedings, attempted to negotiate with the landlord to lower the rent, but as no agreement was reached, it was included among the 15 stores slated for closure.

A Homeplus employee working at the store said, "I heard that the stores will be closed sequentially, five at a time, by next year," but added, "They say employees will be reassigned to other stores, but there has been no specific information about how this will be carried out." The employee continued, "Perhaps due to ongoing reports about Homeplus's difficult situation, the number of customers has clearly decreased compared to before," and added, "Even tenants like Daiso or hospitals, which generate good sales within the building, will eventually have to close as well."

A Homeplus store in Gyeonggi-do scheduled to close next year. The store interior is quiet even on holidays due to the lack of customers. Photo by Kim Heungsun

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The Homeplus side explained, "All 15 stores have excessive rent, resulting in annual operating losses of about 80 billion KRW, which is a significant burden on our recovery efforts," and added, "Since there has been no progress in rent adjustment negotiations, we inevitably had to begin preparations for closure." The company emphasized that improving profitability must come first in order to proceed with the pre-approval M&A process to find a new owner.

They also stated, "We plan to guarantee 100% employment for staff at stores preparing for closure, reassigning them to nearby locations, and providing a certain amount of employment stability support funds," and added, "We will also ensure that tenants in these stores are not harmed, and as soon as the exact closure schedule is determined, we will explain future plans and compensation measures in detail and consult with them accordingly."

Inside a Homeplus store in Gyeonggi Province scheduled to close next year. Photo by Kim Heungsun

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On the other hand, there is considerable distrust toward Homeplus among employees. A store representative claimed, "Whenever payday approaches, the quantity of products delivered to the store drops significantly, and then gradually increases again after payday. This cycle keeps repeating," adding, "Due to the poor financial situation, such temporary measures are being taken."

He also said, "The company publicly claims to guarantee the employment of existing staff, but in reality, when employees retire or resign, no new hires are made. As a result, one person has to do the work of four or five people, or the store has to rely on short-term part-timers to get by," and added, "This squeezing approach, without investing in staff or facilities, is unlikely to change much even after closing some stores."

The Homeplus labor union also argues that the closure of these stores, citing rent as the reason, is merely an excuse by MBK Partners, the private equity fund manager that owns Homeplus, to cover up internal management failures. The union continues to demand investigations and hearings regarding MBK and is calling for intervention from the government and the National Assembly. However, Financial Services Commission Chairman Kim Byunghwan attended the National Assembly's Political Affairs Committee plenary session last week and stated, "We do not have the authority to intervene and prevent the sale of stores," but added, "We will look for ways to prevent harm to Homeplus workers and tenant businesses."

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