Homeplus has been negotiating with the landlords of its leased stores to reach an agreement on rent adjustments, but was unable to finalize an agreement by the deadline of May 15. Consequently, it has reluctantly notified the termination of contracts for 17 stores after receiving court approval. The company stated that negotiations will continue even after the termination.
Earlier, Homeplus entered the rehabilitation process on March 4 and has been negotiating with landlords of a total of 61 leased stores for rent adjustments based on Article 119 of the Debtors' Rehabilitation Act to normalize excessive rent.
Article 119 of the Debtors' Rehabilitation Act stipulates that in the rehabilitation process, the administrator has the option to terminate or perform the lease contract, and the counterpart can also request the administrator for a response regarding the performance of the contract. Homeplus set the deadline for responses regarding contract performance to May 15. If there is no response by this deadline, it is considered a waiver of the right to terminate.
Homeplus noted, "Even if an agreement is not reached in the end, we plan to guarantee the employment of all employees affiliated with the relevant stores. There will be no forced restructuring as a result of this."
They also explained that they will actively support employees in quickly adapting to new workplaces by applying the "employment stability support program" to transition store employees to nearby locations and providing a modest encouragement payment.
Homeplus stated, "We will promptly conclude the rehabilitation process and ensure that we achieve management normalization to fulfill our responsibilities as national infrastructure for living."