Cash Crunch Persists Despite 200 Billion Won Injection... Homeplus Scraps Voluntary Retirement Plan

Notified about 400 voluntary retirement applicants that their retirements were canceled
Postponed payment of unpaid August wages and Chuseok bonuses
Cash-payment burden with business partners puts stores at risk of power disconnection

Homeplus, which is undergoing corporate rehabilitation proceedings, has been unable to escape its financial difficulties despite securing 200 billion won in emergency operating funds. After once again postponing salary payments promised to employees, it also canceled its voluntary retirement program. Disruptions to business with suppliers and store operations have added to uncertainty over the company’s recovery.

According to the retail industry on October 30, Homeplus informed around 400 employees who had applied for voluntary retirement the previous day that their retirement procedures would be canceled. The employees had originally been scheduled to leave on October 31, but the company withdrew the plan, citing “changes in business conditions.”

A Homeplus store. Yonhap News Agency

Homeplus began accepting voluntary retirement applications from headquarters and store employees on October 7. Despite the offer including no separate severance payment, applications poured in, and the company closed the application period early after just one week. The company had planned to pay applicants their unpaid wages, Chuseok bonuses, and severance pay on November 14, but it appears to have canceled the retirement procedures as it became difficult to secure the necessary funds.

Wage payments to current employees have also been postponed indefinitely. Homeplus delayed payment of the remaining 75% of August wages, which had been scheduled for October 30. It paid part of the amount in advance on October 23, but has not set a payment date for the remaining wages or Chuseok bonuses.

The problem is that the company’s liquidity has not improved even after the emergency funds were injected. Homeplus secured 200 billion won in emergency operating funds in July, but its financial burden continues because business with suppliers has not returned to normal.

At a parliamentary audit on October 12, Homeplus CEO Jo Joo-yeon explained that credit transactions with suppliers had not recovered, leaving the company reliant on cash payments and advance payments. With cash being prioritized for purchasing goods, the company is also facing difficulties paying essential operating expenses, including labor costs and electricity bills.

In fact, six stores, including the Pocheon Songwoo and Kintex stores, were notified that their electricity would be cut off at the end of October because of overdue bills. The Incheon Songdo store was also included among those facing disconnection next month.

The sale process is also facing difficulties. No clear prospective buyers have emerged ahead of the deadline for submitting letters of intent at the end of October, according to reports. As wage and operating expense payments have not returned to normal despite the injection of emergency funds, concerns are growing over Homeplus’s prospects for rehabilitation.

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