Homeplus, a major South Korean retailer in corporate rehabilitation, has announced the need for an extension of its rehabilitation plan approval deadline, just a week before it is due. The company's management stated that they are executing various structural innovation plans effectively, highlighting visible improvements in cost reduction and business performance. Specifically, Homeplus has submitted a draft of its rehabilitation plan outlining strategies including a 300 billion KRW emergency management loan, the sale of its supermarket division, the closure of 41 underperforming stores, and workforce efficiencies aimed at reducing labor costs significantly.

The company expects to achieve approximately 160 billion KRW in labor cost savings by reducing its workforce from nearly 20,000 employees last year to about 10,650 by April. In addition to workforce reduction, Homeplus is actively restructuring its store operations by planning to close 19 of the 41 identified underperforming stores by the end of the year, which is projected to improve operating profits by over 100 billion KRW through adjustments in rental fees and store closures.

In a recent court statement, Homeplus revealed that its shareholder MBK Partners is willing to execute an emergency management loan of 100 billion KRW to support its ongoing efforts. However, the chairman of the Korea Development Bank rejected Homeplus's request for operational funding, indicating that they are not involved with Homeplus and suggesting that the retailer should have undertaken more decisive self-restructuring. The deadline for Homeplus to have its rehabilitation plan approved is set for next month, and this period will be critical for its financial recovery.