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Homeplus speeds up sale of stores to secure liquidity

(Homeplus)
(Homeplus)

Amid an overall slump in the retail industry in the wake of the COVID-19 outbreak, retailer chain Homplus is speeding up its asset securitization plan to sell physical stores in order to secure liquidity.

On Friday, Hompeplus said it has decided to securitize a store branch in Daejeon, one week after the retailer announced plans to sell another branch in Ansan, Gyeonggi Province.

The company’s move comes after it recorded the net loss of 532.2 billion won ($442.8 million) during the period between March 2019 and February this year.

Its sales posted a 4.69 percent fall at 7.3 trillion won during the same period, while seeing operating profit plunge 38.39 percent to 160.2 billion won.

Citing sluggish market conditions including worsened consumer sentiment following the COVID-19 pandemic, Homeplus had said it would close multiple physical stores.

For both the Daejeon and Ansan branches, the company vowed to make efforts to not cause any inconvenience to customers, and to continue current operations of the stores for at least six months for their employees and other external partners running businesses in the stores to adjust to the change.

The company also said employment of workers in the two stores will be maintained, and they would either be moved to nearby stores or other major sectors, such as its online business department.

“The offline retail market is in slump, but our plan is to reinforce Homeplus’ strength with an ‘all-line’ strategy to confront the crisis,” Lim Il-soon, the company’s chief executive officer said last month, referring to the strategy of combining strengths of its offline stores and online shopping platform.

“Also, with our principle of leaving no one behind, we will gather the strength of 22,000 employees to overcome the difficulties without personnel restructuring.”

Homeplus hires about 99 percent of its employees as permanent workers.

Rumors have circulated that Homeplus might shut down two more branches, one in Daegu and another in Daejeon. The company told The Korea Herald that no such plan is confirmed, and that it has not set the exact number of stores it plans to close.

By Jo He-rim (herim@heraldcorp.com)
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