 |
Yonhap News |
Major changes are expected in South Korea’s super supermarket (SSM) landscape as Homeplus Co. mulls selling its large-size supermarket division.
According to industry sources on Thursday, the sale of Homeplus Express is expected to gain significant momentum as the retailer seeks a split-off sale of the SSM division.
The divestiture was initiated last year under the leadership of Homeplus’s largest shareholder, MBK Partners Ltd., but discussions came to a complete halt in March this year when Homeplus entered court-led corporate rehabilitation due to its worsening financial conditions.
After this, Homeplus sought a turnaround through a full sale of the company.
However, as it failed to find a buyer and ran into severe cash constraints, the company announced a shift in its rehabilitation plan—focusing on the split-off sale of Homeplus Express and closing some underperforming stores before re-attempting a merger and acquisition (M&A).
Homeplus plans to submit its revised rehabilitation plan to the court by Monday, sources said.
Homeplus identified the SSM division as its first target for sale under its partial divestment strategy as it offers the greatest potential for monetization.
Since filing for corporate rehabilitation, the company has faced severe liquidity stress, including arrears on utility bills such as electricity charges and, this month, having to pay employee wages in installments.
“Among Homeplus’s holdings, Homeplus Express is the asset with the highest cash-generating capacity,” said an industry official. “If the price is adjusted to a reasonable level, it could sufficiently attract the interest of potential acquisition candidates.”
As of September this year, the number of SSM stores in Korea stood at 581 for GS The Fresh, 342 for Lotte Super, 297 for Homeplus Express, and 243 for Emart Everyday.
About 80 percent of Homeplus Express stores are concentrated in the Seoul metropolitan area, and the chain is widely regarded as having well-established online and mobile infrastructure, including its one-hour quick-commerce delivery services.
Despite sluggish performance in the hypermarket segment, Homeplus Express has maintained steady growth, with revenue reaching approximately 1.2 trillion won ($829 million) in 2023.
SSMs, which absorb demand for nearby grocery shopping focused on fresh food, have been among the most steadily growing offline retail channels over the past two years.
When MBK Partners pursued the sale of Homeplus Express in 2024, several strategic investors (SIs), including GS Retail Co., reportedly showed interest due to its growth potential and profitability.
“The sale price discussed during last year’s attempt was between 700 billion and 800 billion won, but given Homeplus‘s current situation, the valuation could fall below that level,” said an official from the investment banking (IB) industry.
A GS Retail official commented, however, that the company is “not considering the acquisition of Homeplus Express.“
Homeplus also plans to proceed with the closure of some underperforming stores.
An industry insider noted that Homeplus is unlikely to rush into selling stores it owns outright, as it needs to preserve the company’s value ahead of an M&A process.
“The company instead will selectively close stores with high rental burdens, which will naturally lead to a workforce restructuring,“ the insider added.
Homeplus has more than 19,000 directly hired workers, and has long been criticized for its excessive burden of selling, general, and administrative (SG&A) expenses.
Market observers suggest that if Homeplus manages to reduce its financial burden and establish a path back to profitability through the sale of its SSM division and store restructuring, its conditions for a future M&A could improve significantly when the company reenters the M&A market.
이 기사의 카테고리는 언론사의 분류를 따릅니다.