South Korea’s Hyundai Department Store Group will pay approximately ₩273.8 billion (approximately $202.6 million) in settlement payments to around 10,000 small and medium-sized partner companies up to nine days ahead of the original due date, ahead of the Chuseok holiday. The measure is designed to alleviate the burden on partner firms facing financing difficulties amid a prolonged economic slowdown and persistently high interest rates and inflation.
The early payment will be made on September 21, before the Chuseok holiday period begins. The beneficiaries include approximately 3,000 vendors transacting with Hyundai Department Store, plus roughly 7,000 vendors across 15 affiliates: Hyundai GF Holdings, Hyundai Home Shopping, Hyundai Green Food, Hyundai Livart, Hanssem, Hyundai Everdigm, Daewon Kangup, Hyundai Bioland, Hyundai Futurenet, Hyundai Duty Free, Hyundai L&C, Zinus, Hyundai Dream Tour, and Hyundai Ezwel. The total represents an increase of about 1,000 companies from the roughly 9,000 covered during last year’s Chuseok.
A group official said, “Ahead of Chuseok, partner companies are expected to face greater financing challenges due to increased working capital needs, including employee bonuses. We are advancing settlement payments to support them.” The official added, “We will continue to develop a variety of support programs to grow together with our long-standing small and medium-sized partners.”
Beyond early settlement payments, Hyundai Department Store Group operates ongoing programs to assist partner companies with cash flow management. Hyundai Department Store has offered an annual interest-free loan program of ₩6 billion (approximately $4.4 million) since 2014, while Hyundai Home Shopping has provided no-cost funding for product and technology development by small and medium-sized enterprises since 2013.
The move comes as the broader retail sector faces earnings pressure from weakening domestic consumption. While major retailers have made a practice of paying suppliers early around major holidays, this year’s sustained high-interest-rate environment is expected to deliver a more tangible benefit to small and medium-sized partners. For suppliers, the early payments will help spread out labor and raw material costs that typically concentrate around the Chuseok period, providing much-needed relief for cash flow management.