Galeries Lafayette Parts Ways with BHV Operator Amid Shein’s Brick-and-Mortar Move

The opening of Shein’s first physical store remains at the center of controversy. The Galeries Lafayette group has decided to end its agreement with Société des Grands Magasins (SGM) and will withdraw its brand from seven regional department stores of the same name operated by this company in France. The decision coincides with the imminent opening of the Chinese giant in the BHV Marais in Paris, which will be followed by its installation, in the coming weeks, in several centers in the provinces that operated under the Galeries Lafayette banner.

This was confirmed by Galeries Lafayette in an official statement sent on Tuesday, notifying the agreement to terminate the affiliation contracts in force since 2021. The breakup will be executed in the coming weeks once the transition schedule is adjusted, in a move that will allow the French group to distance itself from the reputational crisis suffered by the BHV department store, an icon of Parisian retail and French ready-to-wear.French ready-to-wear that, for the vast majority of the sector, has turned its back on local industry and betrayed the values of its proposition by signing an agreement with the giant Shein.

The decision agreed between the two companies will affect the department stores located in the smaller cities of Angers, Dijon, Grenoble, Le Mans, Limoges, Orléans and Reims, which will cease to operate under the Galeries Lafayette brand. SGM will continue to manage these centers under a new identity to be communicated shortly.

Galeries Lafayette and SGM have suffered strategic divergences due to the arrival of Shein.

The final break-up follows strategic differences between the two companies, with the French group having publicly expressed its rejection of Shein’s positioning and practices, arguing that ultra-fast fashion is incompatible with its values and its commercial offer.

The case has become almost a matter of state in France, both because of the public exposure brought about by Shein’s physical landing in the historic center of Parisian retail and because it is one of the main focuses of the law aimed at limiting the impact of ultra-fast fashion. In addition, the platform is currently facing an investigation in the country following complaints related to the marketing of products considered to be of high social risk.

SGM, a recent player under pressure

Société des Grands Magasins, created in 2021 by Frédéric and Maryline Merlin, is at the center of public and media debate following its alliance with Shein. The operator manages the BHV space and several centers in the provinces.

In the official communication, Galeries Lafayette and SGM assure that they are holding talks in a constructive spirit and that they will work to ensure an orderly and respectful transition with the teams and customers while executing the exit of the ensign.