The article discusses the challenges faced by Homeplus in its corporate revival efforts, particularly in the context of legal and financial struggles involving its management and stakeholders.
The article focuses on the ongoing struggles of Homeplus, a major South Korean retailer, as it attempts to navigate through a corporate revival process that has been ongoing since its entry into rehabilitation in March 2025. A recent ruling by the court denied a prosecution request for the detention of MBK Partners executives, citing insufficient evidence regarding the financial misconduct allegations. This outcome is seen as a stabilizing force for Homeplus, as a detention order could have severely jeopardized its chances for survival amid bankruptcy risks.
Homeplus’s search for a new owner concluded unsuccessfully by the end of 2025, prompting the need for aggressive restructuring strategies to facilitate the acquisition process. The company has submitted a 'structural innovation revival plan' aiming to recover through significant cost-cutting measures, financial support from key creditors, and the sale of its supermarket division. A targeted approach to managing its workforce through natural attrition and redeployment is planned rather than forceful layoffs, aiming for a breakeven point within three years. However, the success of this endeavor relies heavily on reaching agreement with creditors and obtaining necessary funding for essential operations.
Despite MBK’s willingness to invest 100 billion won, there has been a noticeable impasse regarding funding from other creditors, notably Meritz and the Industrial Bank of Korea, leading to significant delays in the implementation of the revival plan. Meritz is hesitant to increase its financial commitment, as it holds substantial real estate collateral that would allow for the recovery of its loans even in the event of liquidation. Additionally, for the government managing the Industrial Bank, the reluctance to support what appears to be a failing private enterprise stems from the potential for future accountability issues. The implications of Homeplus’s revival are significant, not only for its employees and stakeholders but for the broader South Korean economy, as its success could lead to stabilization in the retail sector.
