'We were told restoration fees were waived' — Homeplus tenants furious over reversal at 67 stores

"After Homeplus suspended operations, my sales dropped 80 to 90 percent — enough that I couldn't pay my part-time workers. I thought about leaving, but the company told me I had to restore the space to its original condition before I could go." — So Hyeon-jeong, tenant at the Suncheon branch in South Jeolla Province

Homeplus tenants on the brink of bankruptcy are speaking out day after day about the losses they have suffered. Since the company unilaterally halted operations at 67 stores nationwide on July 13, their sales have collapsed — and now many find themselves unable to leave even if they want to. What is trapping them is a lease clause requiring tenants to restore their spaces to original condition upon exit. With the company short-staffed on the operational side, some branches have reportedly lost contact with headquarters altogether.

So, who has run a food-and-beverage stall at the Homeplus Suncheon branch for more than three years, said Tuesday she had contacted the company three times about exit procedures — including immediately after the July 13 suspension — and received the same answer each time. "Every time, they told me I had to restore the space before leaving," she said. A contractor's estimate put the cost at more than 90 million won ($61,400). "Homeplus caused this through its own failures, and tenants are the ones suffering the sales losses — yet they're still demanding we pay for restoration. I can't accept that," she said, her voice breaking.

The problem is playing out at stores across the country. Kang Gyeong-mo, vice chairman of the Homeplus Tenant Association, who has run an optical shop at the Homeplus North Suwon branch for nine years, said he decided not to renew his lease when it expires at the end of August because business had become untenable. He too was told he must restore the space, at a cost of around 5 million won. "With bankruptcy being discussed as a possibility in September, is it really right to hold tenants to restoration obligations?" he asked.

Kang said the majority of the association's roughly 340 member tenants want to leave but cannot because of the financial burden. "They are looking at restoration costs ranging from a few million won to, in some cases, hundreds of millions of won," he said.

A tenant identified only as A, who decided to exit a Homeplus store in the Chungcheong region, said the issue goes beyond restoration fees. "I also have to pay the remaining 6.7 million won in installments for a renovation I undertook on the assumption the store would keep operating — and now I have to cover all of it at once," the tenant said. The tenant added: "The whole premise — that a hypermarket would keep drawing customers — has collapsed. It's too much to ask tenants who are leaving because of sales losses to shoulder all the fees, operating costs and restoration expenses on top of everything else."

A tenant identified as B, who decided to leave the Homeplus Asiad branch in Busan this month, said the situation was equally baffling. "The store is closing because of Homeplus's own management failures and its rehabilitation proceedings. I cannot understand why tenants should bear the cost and responsibility for that," the tenant said.

Earlier, Homeplus waived restoration obligations for tenants at the 37 stores suspended in May. At the time, critics called the company's unilateral decision an unfair trade practice that harmed tenants without prior consultation, and the Korea Fair Trade Commission stepped in to mediate. Those 37 stores were subsequently confirmed for permanent closure.

A Homeplus official said the situation at the 67 stores is different. "Unlike the 37 stores, where closure was a possibility at the time, the 67 stores are resuming operations," the official said. "Internal discussions regarding the 67 stores are ongoing, but no policy on tenant exits has been decided yet."

Meanwhile, Homeplus is expected to reopen the 67 stores around Aug. 10. The plan is to resume operations within seven days of receiving emergency operating funds — 200 billion won in debtor-in-possession financing approved by its largest creditor, Meritz Financial Group — which is expected to arrive between Friday and Monday.

Rather than returning to its previous retail model, Homeplus has adopted an approach modeled on the American retailer Trader Joe's, focusing exclusively on high-volume, fast-moving daily necessities, food and private-label products. Store floor space will also be reduced to between roughly 2,000 and 3,300 square meters. Staffing will be scaled back and reassigned based on each store's conditions and employees' preferences.