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CEO of MBK Partners-owned Korean retailer to resign

By Jan 07, 2021 (Gmt+09:00)

HomePlus Chief Executive Lim Il-soon, on left, shakes hands with an employee. 
HomePlus Chief Executive Lim Il-soon, on left, shakes hands with an employee. 

Lim Il-soon, chief executive of South Korean retailer HomePlus, is stepping down after leading the MBK Partners-owned discount store chain for about three and a half years.

Lim, the first female CEO of a Korean retailer, abruptly expressed her intention to resign for personal reasons at an executive meeting on Jan. 7. Her resignation was accepted, according to company sources.

“We were embarrassed at her abrupt resignation announcement because she presided over an executive meeting yesterday to set 2021 business plans,” a HomePlus source told The Korea Economic Daily.

“Now MBK Partners is searching for her successor. But it is not easy to find one with as much experience in both retail industry and finance as her,” said an investment banking source.

North Asia-focused MBK acquired 100% of HomePlus for 7.2 trillion won ($6.6 billion) in 2015. Shortly after the acquisition, the private equity firm hired Lim, the ex-chief financial officer of Costco's Korean operation, as HomePlus' CFO.

After she was promoted as chief executive in May 2017, in 2019 she converted all of the 15,000 open-ended contractors at the retailer to full-time employees. At the time, it was the largest-scale conversion into permanent positions by a Korean company. Currently, 99% of HomePlus staff are full-time employees.

During her tenure, she transformed the company's offline-focused business model to expand online services, using all its stores as logistics centers for the online business as well.

But the rise of online rivals took a heavy toll on the business, alongside regulations banning offline stores from operating after midnight. Minimum wage rises and rent increases also weighed on earnings.
 
HomePlus saw its net losses widening to 532.2 billion won in the fiscal year of 2019 ended in February 2020, versus a shortfall of 132.7 billion won a year earlier. Its operating profit dwindled by almost 40% to 160.2 billion won during the period, with a slight drop in sales.

Separately, MBK is bidding for JobKorea, the country's top recruitment portal, seven years after it lost to another private equity house H&Q. MBK is among the six to seven shortlisted bidders for a 100% stake in JobKorea, which H&Q purchased for 200 billion won. Other final bidders include CVC Capital, Affinity Equity Partners and TPG, according to investment banking sources on Jan. 4. 

Write to Dong-hui Park at donghuip@hankyung.com

Yeonhee Kim edited this article.

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