Homeplus submits revised restructuring plan, projects 1.2 trillion won cost reduction

Homeplus is making a final push for survival, submitting a revised restructuring plan to the Seoul Rehabilitation Court as its rehabilitation proceedings near a decision. The company outlined a drastic self-rescue effort, including reorganizing its 104 large stores into 67 core locations and reducing its workforce by approximately 50% through natural attrition and voluntary retirement.

The retail giant also plans to simplify its business structure by selling its express supermarket division, Homeplus Express, to Harim Group's NS Shopping. These measures are expected to cut costs by about 1.2 trillion won compared to pre-rehabilitation levels. Homeplus anticipates that the 67 core stores, once normalized in terms of supply and operations, can achieve an operating profit of 80 billion won, with projections to increase this to 150 billion won within three years.

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The cost has decreased by approximately 1.2 trillion won compared to before the rehabilitation filing, and the 67 core large stores, once supply and operations are normalized, can immediately achieve an operating profit of 80 billion won.

Homeplus aims to repay all rehabilitation and public claims in full using profits from its turnaround and proceeds from selling properties of closed stores. The company also intends to pursue mergers and acquisitions based on its improved profitability. Homeplus expressed confidence that the reduced burden on potential acquirers, following the sale of the express division, will attract interest from investors looking to enter the domestic retail market.

However, the court has urged stakeholders to submit opinions on the potential termination of the rehabilitation proceedings by May 30, citing a lack of realistic and concrete plans for an additional 200 billion won in funding. The deadline for the approval of the rehabilitation plan is June 3.

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As Homeplus has significantly improved its business viability, and the potential acquirer's burden has been greatly reduced by selling the express division, it is expected to attract the interest of potential acquirers who want to participate in the domestic distribution industry while minimizing new entry risks.