As of the end of January this year, Homeplus’s debt ratio has reached 1835%, causing difficulties in securing funds from financial institutions and foreseeing lengthy repayment processes through rehabilitation procedures. Homeplus is now focusing on large-scale promotions to urgently secure cash. The company has launched the final week of its ‘Encore Homeplus Is Back’ event with significant discounts, such as half-priced beef, pork belly at 1,790 won, and strawberries at 4,990 won, to bolster cash flow.
The retail chain finds itself under intense repayment pressure from suppliers, store owners, and entities holding its financial obligations. Although Homeplus has managed to repay over 90% of its immediate March debt by mid-March, concerns linger due to its high debt ratio and a working capital deficit of roughly 800 billion won.
Additional challenges include the apprehension among in-store owners regarding settlement payments and attempts to streamline processes by mandating the use of company-issued POS systems. Meanwhile, reductions in workforce costs are evidenced by voluntary retirements in some regions.
Homeplus insists that its recent discount events were pre-planned and not reactionary cash-grabbing moves, promising restraint from running large-scale promotions in the near future.