Nonghyup reabsorbs Hanaro Distribution after 111.3 billion won of three-year operating losses

Revenue fell by 111.1 billion won between 2023 and last year, from 1.2915 trillion to 1.1804 trillion ^[6][14]. The three-year operating loss was 111.3 billion won ^[5]. The near-match is coincidence. The loss works out at 37.1 billion won a year, about 3.1% of last year's revenue ^[15][16].

The funding shows up in the liabilities. They rose from 212.3 billion won in 2023 to 288.5 billion won last year, an increase of 35.9%, or 76.2 billion won ^[7][17]. The windows do not line up exactly, since the loss figure covers three years and the liability figure two, but 76.2 billion won of new liabilities did not cover 111.3 billion won of operating losses, and roughly 35 billion won of the gap came out of the equity side ^[18]. The company slipped into partial capital erosion in 2024, and the rate went from 9.0% at the end of 2024 to 19.1% a year later ^[8]. The report describes workforce, assets and store operations moving to the holding company; it does not say how the liabilities are handled ^[4][19].

The stores are the operating question. "We are reviewing various measures to improve the performance of loss-making stores, and for those judged unlikely to recover, we may pursue steps such as converting them to other uses," a Nonghyup official said ^[12]. The same official said, "In that case, employees there will be reassigned to nearby stores or offices" ^[13].

Nonghyup has tried this before. Hanaro Distribution was launched in 2015 alongside a plan to absorb other distribution affiliates into a single organisation, and that plan never materialized ^[10]. In 2021 three regional distribution companies were merged into Nonghyup Retail, and the retail division has operated on two companies since ^[11]. The account of the current merger comes from retail industry sources, and it puts the spinoff about 12 years ago while dating the launch to 2015 ^[3][2][10].

In my view this is the cheap answer to a loss the group was going to carry either way: dissolving a legal entity removes a headquarters and a set of accounts, and it does not close a single unprofitable store. The counter-reading is in the design of the merger, which leaves purchasing and supply with the holding company and concentrates sales at Nonghyup Retail ^[9], and one buying desk over a 1.1804 trillion won sales base is where a group of this shape would look for margin ^[6]. The stated aim is higher operating efficiency ^[1].

The test arrives in the first half of next year. If the group converts or closes loss-making stores, the efficiency case holds. If the estate stays as it is and 37.1 billion won a year of operating loss simply lands on the holding company's accounts, the merger moved the loss and nothing else ^[15].