Berliner Boersenzeitung - Shein's Paris store kicks up a storm in France

Anger has been boiling since Shein announced last week that it would open its first permanent physical store in November at BHV Marais, an iconic building that has stood across from Paris City Hall since 1856.

The move prompted some French brands to announce they would leave BHV Marais, but the department store had already been losing tenants over late payments.

Aime cosmetics line co-founder Mathilde Lacombe, whose brand was among those that decided to leave following Shein's announcement, said she was "deeply shocked" by the deal.

Critics fear that Shein -- whose meteoric rise has been a bane for traditional retail fashion companies -- will further hurt stores in France that have had to lay off staff or close.

Founded in China and now based in Singapore, the fast-fashion giant sells a wide variety of products at ultra-competitive prices.

But it has also been under global scrutiny over its business model's impact on the environment and labour conditions at its textile factories.

"Opposite the Paris Mayor's office, they will create a new Shein Megastore that -- after having destroyed dozens of French brands -- could flood our market even more massively with disposable products," said the trade association for French ready-to-wear women's clothing companies, the FFPAPF.

The European Commission is investigating Shein over risks linked to illegal products, while EU lawmakers last month approved legislation aimed at curbing fast fashion's environmental impact.

"Shein's arrival goes against our convictions," former French environmental transition minister Christophe Bechu told AFP.

- 'Honouring' the fashion capital -

Shein has spun its entry into physical retail in France as a homage to the country and its central place in fashion.

"By choosing France as the place to trial physical retail, we are honouring its position as a key fashion capital and embracing its spirit of creativity and excellence," said Donald Tang, Shein's executive chairman.

"It is fitting that this journey starts in Paris, at BHV -- the birthplace of modern retail," he added.

The company also plans to open shops at Galeries Lafayette department stores in the cities of Dijon, Reims, Grenoble, Angers and Limoges.

BHV Marais and the five Galeries Lafayette locations are operated by retail property group Societe des Grands Magasins (SGM).

SGM is seeking to buy the BHV Marais building from Galeries Lafayette, but the state-owned bank it hoped would help finance the purchase decided to pull out over the Shein partnership.

"The Bank of Territories learned about this partnership through the press, without any prior notification, resulting in a breakdown of trust between the two parties," it said in a statement.

SGM denounced "political pressure" behind the move but insisted it could still carry out its purchase of the building.

Galeries Lafayette also voiced its opposition to Shein boutiques opening in the five locations bearing its name, although it no longer operates those locations.

"Galeries Lafayette expresses its profound disagreement with this decision in light of the positioning and practices of this ultra-fast-fashion brand that are in contradiction to its own offering and values," it said in a statement following the announcement.

- Exodus -

SGM already had a number of luxury brands quit BHV Marais over payment delays prior to Shein's arrival.

SGM said the multi-million-euro payment delays are temporary, blaming the rollout of a new automated accounting system, and denied any cash flow problems, noting BHV returned to profitability in 2024.

Still, the effects are visible in empty shelves and sparse aisles at BHV, which directly employs 750 people, particularly in DIY and stationery departments.

French underwear firm Slip Francais said it had to launch legal proceedings against SGM over the delays in transferring revenues from sales made at BHV.

"It's a partner in which we no longer have confidence," Slip Francais founder Guillaume Gibault told AFP.

The Shein deal "only confirmed that we had taken the right decision" to leave BHV Marais, he added.

(K.Lüdke--BBZ)