Homeplus races to prove viability ahead of court ruling on revival plan

Homeplus is pushing hard to normalize operations as the deadline for completing its court-led rehabilitation process draws near. But sales that surged on the back of deep discounts have since edged lower, and the merger and acquisition process for its remaining business unit — the linchpin of its recovery — has yet to show any sign of progress.

The sale process for the remaining business unit, launched in May, is still ongoing, Homeplus said Monday. Harim Group, which earlier acquired Homeplus Express, is among the parties reported to have shown interest. The company's substantial bond obligations, looming restructuring questions and the court's pending rehabilitation ruling have all emerged as obstacles. "There are issues that need to be resolved before reaching the ultimate goal of an M&A deal," a source familiar with the matter said. "The first hurdle is getting the rehabilitation plan approved by the court on Sept. 4."

Internally, voices within Homeplus argue that stabilizing sales through the Chuseok holiday season — a peak retail period — after court approval of the rehabilitation plan is essential for the M&A process to gain real momentum. The company drew consumer attention with large-scale promotions after reopening its 67 stores, but the recovery proved short-lived.

According to Homeplus, total sales over the five days from the reopening of all 67 stores on Wednesday through the weekend to Sunday reached 43.7 billion won ($31.6 million), a 191 percent increase compared with the July 2–6 period just before operations were suspended. Average daily sales rose from 3 billion won to 8.7 billion won over the same comparison period, while average daily customer traffic climbed nearly 74 percent, from 138,200 to 239,600. More recently, sales have dipped slightly due to supply constraints stemming from unresolved payment disputes with suppliers.

Homeplus's moves since reopening are widely seen as an effort to demonstrate the remaining business unit's market competitiveness to stakeholders — including the court, creditors and potential acquirers. The company has pointed to the operational recovery of Homeplus Express under Harim Group as evidence that its remaining stores can rebound following a 200 billion won debtor-in-possession loan.

To address its heavy debt load, Homeplus plans to sell 19 of the 37 stores it closed in July, using the proceeds to repay trust-secured bonds held by its largest creditor, Meritz Financial Group, in full by February 2028. Once those bonds are cleared, the company intends to use the remaining 38 company-owned stores among the 67 currently operating as collateral for real estate-backed loans to repay other outstanding debt in stages.

Homeplus projects that its 67 stores will post annual sales of around 4.3 trillion won and operating profit of around 162.8 billion won in 2030, the year its first loan is expected to be drawn, following a return to profitability in 2029. Operating profit is forecast to grow to around 218.2 billion won by 2037. On that basis, the company expects to generate annual free cash flow of between 150 billion and 300 billion won.

Whether the vision laid out in the rehabilitation plan can be realized remains uncertain. The immediate test comes Tuesday, when a creditors' assembly will scrutinize the plan. If stakeholders consolidate opposition there, the rehabilitation plan will be scrapped.

Seo Yong-gu, a professor at Sookmyung Women's University's School of Business, said the court must weigh a broad range of factors. "The court needs to look carefully at the economic impact of mass unemployment if Homeplus goes bankrupt, as well as the further deterioration it would bring to the offline retail environment," he said. "A comprehensive judgment is needed that goes beyond the numbers on a balance sheet."