[The Editors' Verdict] Is Liquidation the Answer for Homeplus?

Homeplus Effectively Faces a Death Sentence

Applying Only Market Logic Is Irresponsible

In the end, even the ventilator was removed. Homeplus, the country’s second-largest hypermarket operator, which abruptly entered corporate restructuring in March last year, effectively received a death sentence on July 3, 2026, when the Seoul Bankruptcy Court decided to terminate its rehabilitation proceedings. This was because it failed to secure the emergency operating funds of 200 billion won needed for recovery. MBK Partners, the majority shareholder of Homeplus, and Meritz Financial Group, the largest creditor, are blaming each other for the situation. It appears that both sides see further investment as pouring water into a bottomless pit.

The government also moved quickly to cut its losses. On the day the decision to end Homeplus’s rehabilitation was announced, the Ministry of Economy and Finance stated that it would provide emergency liquidity support of 440 billion won to partner companies, and offer up to 21 million won per worker in back pay advances and livelihood loans for employees with overdue wages. The court has given the parties until July 20, 2026, to file an immediate appeal, but this move is seen as preparation for liquidation.

Public sentiment is also cold. Articles about the Homeplus bankruptcy crisis are flooded with cynical comments such as “Why should the government take responsibility for the mismanagement of a private company?” and “Let the Korean Confederation of Trade Unions purchase it.” These are mocking both the management failures of MBK Partners, which acquired Homeplus, and the frequent strikes by the Homeplus labor union under the KCTU.

From a purely market logic perspective, liquidation may be the only answer for Homeplus. Samil PwC, which was commissioned by the Seoul Bankruptcy Court, valued Homeplus’s going concern value at 2.5059 trillion won and its liquidation value at 3.5816 trillion won. Even if MBK Partners and Meritz Financial Group were to inject additional rescue funds, it may still be difficult to ensure the company’s sustainability.

However, there are aspects that cannot be explained by market logic alone. Hypermarkets are a labor-intensive industry. All tasks, from moving to displaying goods in stores, are done by hand. This structure inevitably brings a heavy labor cost burden. During the rehabilitation process, Homeplus reduced the number of stores from around 130 to 67. The number of employees, which was close to 20,000 before restructuring, has recently dropped to 9,000. As salaries were cut off, many left the company, some voluntarily and others involuntarily. Last year, labor costs reached 600 billion won, but this year they have reportedly been drastically reduced to about 170 billion won. Some employees began voluntarily giving up their pay as early as May. This shows how strong the will to survive was.

When a single Homeplus store closes, it is not only the employees who lose their jobs. Tenant entrepreneurs, suppliers, logistics workers, and even the surrounding commercial districts are hit by a chain reaction. Furthermore, individual investors who put money into 480 billion won worth of asset-backed securities (ABSTB—Asset-Backed Short-Term Electronic Bonds) will also find it difficult to recover their investments.

It is irresponsible to explain this situation by market logic alone. 

Immediately after Homeplus filed for rehabilitation last year, politicians summoned the Homeplus management and Kim Byung-joo, CEO of MBK Partners, to hold them accountable. This is a recurring pattern whenever a corporate issue arises, regardless of the political party. However, no regulatory improvements or countermeasures have been introduced to date. As other issues such as Coupang’s personal data breach occur, the public’s anger simply shifts to a new target.

The responsibility for business failures lies with management and majority shareholders. The consequences of poor investment decisions and loss of product competitiveness must be clearly addressed. However, it is also important to consider how to protect the employees, partner companies, and individual investors who are the first to suffer in such situations.

This content was produced with the assistance of AI translation services.