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🇰🇷 South Korea /Economy & Trade

Homeplus employees feel abandoned as stores close amid bankruptcy fears

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

In-depth Named sources In the courts
  • Homeplus, a major South Korean retailer, is facing bankruptcy, leading to the closure of 36 stores and uncertainty for thousands of employees and affiliated businesses.
  • Employees, many earning minimum wage, express feelings of abandonment and fear for their future as delayed salaries and financial instability impact their lives.
  • The company's struggles are linked to its acquisition by MBK Partners in 2015, which reportedly prioritized debt repayment over innovation, leading to financial distress and a corporate restructuring process.

The once-bustling Homeplus store in Gajwa, Incheon, now stands largely empty, its entrance sealed with plastic sheeting. Only a few leased shops inside remain lit, a stark contrast to the vibrant retail hub it once was. The silence is broken only by the faint, familiar Homeplus jingle, a haunting reminder of better times.

For employees like Choo Eun-sook, 57, who worked at the Gajwa branch for 15 years, the store's closure on May 9th marked the end of an era. She recounts being moved to tears by a customer's simple "Thank you for your hard work" on the last day. Homeplus's temporary suspension of operations at 37 branches, followed by the decision to close 36, has thrown the futures of approximately 80,000 people into jeopardy, including direct employees, contract workers, and tenants.

I don't know how to work with this kind of heart. I live paycheck to paycheck, and the fear of not getting paid is a fear for survival.

— Park Kyung-aeA Homeplus employee expresses her anxieties about the company's financial instability and its impact on her livelihood.

Choo, who earned just over minimum wage, relied on her salary to support her family, pay off debts, and even start saving. However, since MBK Partners acquired Homeplus in 2015, she felt the company losing its competitive edge. The acquisition, financed heavily by loans, seemed to focus on debt repayment rather than innovation. This financial strain led Homeplus to file for corporate receivership in March, resulting in delayed salary payments for employees, sometimes by one or two months.

You can't disappear. My memories are here.

— High school studentA student expresses sadness over the potential closure of the Homeplus store.

"I don't know how to work with this kind of heart," said Park Kyung-ae, a Homeplus employee who was transferred to another branch after her store closed. "I live paycheck to paycheck, and the fear of not getting paid is a fear for survival." Many employees have left due to the uncertainty, with some even facing difficulties securing loans as the company struggled to pay health insurance premiums.

The impact extends beyond employees. Small business owners operating within Homeplus stores face their own anxieties, fearing they won't recoup their investments. Local communities are also concerned about the "hollowing out" of their neighborhoods as these major retail centers disappear. Choo recalls a high school student telling her, "You can't disappear. My memories are here." Meanwhile, union members are staging a hunger strike, demanding the company's normalization, but solutions remain elusive.

We feel like we are being abandoned, told that 'you, minimum wage workers, are nothing.'

— Choo Eun-sookA Homeplus employee describes her feelings of abandonment amid the company's financial crisis.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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