Why it matters. The fight over Homeplus is a high-profile test of how South Korea handles private-equity ownership of major employers, an issue echoing debates in the US and Europe over PE firms hollowing out retail chains.
Background. MBK Partners, founded by dealmaker Michael ByungJu Kim, is one of Asia's biggest buyout funds and a frequent target of Korean labor anger. Homeplus ranks among Korea's top hypermarket chains alongside E-Mart and Lotte Mart. Court-supervised 'rehabilitation' lets a struggling firm keep operating while reorganizing debt under judicial oversight, but unions fear it becomes cover for mass layoffs.
What to watch next. Watch whether the government activates its promised UAMCO intervention and whether MBK offers concrete financing, as the hunger strike and store-closure timeline raise pressure on both.
Union demands action as Homeplus moves to close 37 stores
South Korea’s largest umbrella labor group, the Korean Confederation of Trade Unions (KCTU), said on June 5 that a decision to permanently close 37 Homeplus stores will cost roughly 20,000 people their jobs, and demanded that both the retailer’s private-equity owner, MBK Partners, and the government step in to stabilize the company.
Homeplus is one of South Korea’s three largest hypermarket chains, a big-box grocery-and-general-merchandise format similar to Walmart Supercenters or Tesco Extra. The chain is currently undergoing court-supervised rehabilitation, a process comparable to Chapter 11 bankruptcy in the United States. A day earlier, the company notified the union that it would shut 37 stores nationwide — outlets that had already been suspended since May 10 — and open a voluntary-retirement program.
‘Eat-and-run management,’ the union charges
In a statement, the KCTU said the closures would strip jobs not only from 3,500 directly employed permanent workers but also from an estimated 20,000 people once subcontractors, outsourced staff and in-store tenant businesses are counted. It called the move a reckless rush to shutter stores that threatens the livelihoods of retail workers and could trigger a mass-unemployment crisis.
The union placed the blame squarely on MBK Partners, a Seoul-based private-equity firm and one of Asia’s largest, which acquired Homeplus in 2015. The KCTU accused MBK of selling off the chain’s assets cheaply, loading Homeplus with high rents, and turning profitable stores into loss-makers. It described this as a textbook case of “meoktwi” management — a Korean term, literally “eat and run,” used to describe owners who extract value from a company and walk away, leaving workers and creditors behind. The union urged MBK to stop hiding behind claims that operating loans are hard to secure and to implement every available self-rescue measure, including payment guarantees.
Government promises unfulfilled
The KCTU also pressed the government to act. Authorities and the ruling party had earlier pledged to use UAMCO (United Asset Management Company), a state-linked distressed-asset manager, to restructure Homeplus’s debts and find a new buyer. According to the union, none of those measures have yet been carried out. It called on the government to honor its UAMCO commitment immediately and to back operating-capital support with policy.
The dispute has spilled into the streets. Since May 14, members of the Mart Industry Union’s Homeplus branch have staged an open-ended hunger strike in front of the Admiral Yi Sun-sin statue in Gwanghwamun Square, a central Seoul plaza that is the country’s traditional site for public protest. Additional members, including a senior branch official, joined the hunger strike a day before the union’s latest statement.
The KCTU said restructuring built on workers’ sacrifices can never be a solution, vowing to fight with all its strength until further closures and dismissals are halted and concrete steps are taken to put Homeplus back on stable footing.
