The Homeplus branch of the Mart Industry Union under the Korean Confederation of Trade Unions held a kick-off ceremony at Gwanghwamun Square in Jongno District, Seoul, on the 28th of last month before beginning a three-steps-one-bow march toward the Blue House to call for Homeplus to be normalized. Yonhap News

Homeplus, which is undergoing rehabilitation proceedings, has decided to close 37 stores where operations were temporarily suspended. It will also implement a voluntary resignation program for roughly 3,000 workers at the affected stores.

According to the retail industry and the Homeplus branch of the Mart Industry Union on the 4th, Homeplus sent an official letter to the branch and to the Homeplus General Union the same day stating that it had decided to close the 37 stores that are shut. Homeplus announced on the 8th of last month that 37 out of its 104 hypermarkets would be temporarily closed, and two days later, on the 10th, it shut them.

Homeplus plans to apply its asset securitization store support program, a restructuring assistance scheme, to employees at the 37 stores to be closed. It will accept applications for voluntary resignation from managers at the Responsibility rank and above who work at the stores scheduled for closure. Employees with less than six months remaining until mandatory retirement are excluded. Senior staff below the Responsibility rank can receive employment stability support payments under the employment stability support agreement previously concluded between labor and management.

However, Homeplus said that the asset securitization support program and voluntary resignations can be implemented only if, due to the depletion of operating funds, the creditor group agrees to a debtor-in-possession (DIP) loan and to an extension of the rehabilitation process. The company added that the only way to revive the business is to sell it to a third party with guaranteed capital strength and management capability, as with Express, and that for a pre-approval M&A to succeed it is essential to normalize operations at key stores and restore competitiveness to previous levels. As Homeplus is making a DIP loan and other conditions prerequisites, it is uncertain whether employees will in fact receive voluntary severance or employment stability support payments.

According to the Mart Industry Union, the number of workers affiliated with the 37 stores is estimated at about 3,500. Both inside and outside the union, there are projections that some of the 67 stores still in operation will also close in the near future. The union urged that while it can accept the trimming of some stores for normalization, indiscriminate closures like those now under way will only hinder normalization, calling on the major shareholder MBK to do everything it can, such as providing payment guarantees for goods, and on the government not to stand by in the face of mass unemployment but to move forward with the promised normalization.