Red flags raised even before Homeplus crisis: Sales fall, credit ratings cut

Even before South Korea’s second-largest hypermarket chain Homeplus Co. was put under court receivership due to its worsening financial woes, the warning signs were there.

Sales at the retail giant stumbled in the run-up to Homeplus’ filing for court protection on March 4. The downward trajectory, however, began years earlier, with its credit ratings downgraded several times amid an uphill battle to catch up to rivals – signaling its deepening financial woes.

According to Korean alternative data platform KED Aicel, credit card transactions at Homeplus outlets totaled 1.13 trillion won ($781 million) in the first two months of 2025, an 8.5% on-year decline from 1.24 trillion won in the year-earlier period.

Analysts said the sluggish performance contributed to Korea Investors Service Inc., a Moody’s affiliate, downgrading Homeplus' credit rating to A3 minus from A3 on Feb. 28.

Four days later, private equity firm MBK Partners Ltd., which wholly owns Homeplus, filed for corporate rehabilitation of the hypermarket operator with the Seoul Bankruptcy Court.