Homeplus has decided to permanently close 37 stores that suspended operations last month, about a month after it began a store efficiency drive aimed at normalizing its management.
According to industry sources Friday, Homeplus recently said in an official letter sent to its labor union that "we have decided to close 37 stores currently suspended due to their low contribution." Earlier, Homeplus had temporarily halted operations at 37 underperforming stores out of its 104 stores nationwide starting last month.
At the time, Homeplus explained that it would suspend operations at the 37 stores until July 3, the deadline for the approval of its rehabilitation plan. The company had planned to improve operational efficiency by concentrating limited supply on its key stores to respond to declining sales caused by disruptions in product procurement. However, with business conditions not clearly improving even after the suspension, the company is understood to have decided to close the stores rather than resume operations at them.
The stores slated for closure include the Junggye, Sinnae, Myeonmok and Jamsil stores in Seoul; the Centum City, Busan Banyeo, Yeongdo and West Busan stores in Busan; the Sangin store in Daegu; and the Gajwa, Sungui, Yeonsu, Songdo and Nonhyeon stores in Incheon.
According to the union, about 3,500 employees work at the stores subject to closure. Homeplus plans to carry out a voluntary retirement program for employees at the manager level or above at the stores scheduled to close, and to pay severance equivalent to three months of monthly salary.
However, securing funds to pay the voluntary retirement benefits is not easy. Homeplus plans to run an employment stability support program through reassignment between stores in parallel with the voluntary retirement program, but its financial capacity is reportedly not sufficient at present.
"We are preparing various support measures to ensure employment stability," a Homeplus official said. "We plan to proceed with the voluntary retirement benefit payment process as soon as funding issues such as the DIP (debtor-in-possession) loan are resolved."
