Homeplus CEO lays out plan to beat slump

Homeplus CEO Lim Il-soon promised employees she would raise the brand’s reputation in an increasingly competitive retail market, the company announced Monday.

In a handwritten letter to employees, Lim acknowledged the current market difficulties and suggested key business strategies to solidify Homeplus’s standing in the retail market.

The announcement was made after Homeplus unveiled its figures for the last tax year on Friday. Its operating profit from March 2018 through February 2019 plunged 57.59 percent on year to 109 billion won ($97 million), while its sales inched down 3.67 percent to 7.66 trillion won.

Homeplus cited increased minimum wage and rent fees as the major reasons for the disappointing figures.

“The survival of retail operators is at risk amid rising uncertainties in the retail business these days,” Lim told employees. “I acknowledge that the continuous drop in profit and rising costs amid the intensified competition have made the future of retail companies less clear.”

“It isn’t just the regulations against discount marts that pressured giant discount chains. The more important factor we should have noticed was the changing customers and the competition structure,” Lim added while referring to the increased number of online retailers and convenience stores.

Escaping old traditions and embracing innovation will be the key to success, according to Lim. As part of the effort, Homeplus will expand the number of Homeplus Special stores and strengthen its mobile business by increasing the competitiveness of its delivery service.

BY JIN MIN-JI [jin.minji@joongang.co.kr]