Galeries Lafayette Lists BHV Marais Building Amidst Shein Controversy

Galeries Lafayette wants to turn the page after the reputational crisis caused by Shein’s landing in one of its key properties. The French department store group has announced that it is in exclusive negotiations to sell the historic building that houses the BHV Marais, besieged in the central rue de Rivoli, in the heart of Le Marais. The conglomerate has not revealed the identity of the potential buyer, however, which it defines as an Anglo-Saxon player specializing in real estate assets, and places the closing of the transaction as early as January.

According to the press release, the sale is proposed under the conditions initially envisaged with the current manager, Groupe SGM (Société des Grands Magasins): the investor would acquire the property in agreement with SGM, which would continue to operate BHV.

The announcement also comes after the expiration of the timetable agreed in 2023, when Galeries Lafayette sold the BHV business to SGM. That agreement contemplated that the new owner of the department store had until the end of 2025 to also buy the building, with expiration set for December 19th.

Galeries Lafayette is negotiating with another buyer for the sale of the BHV Marais property

The transaction comes in the midst of controversy over the implementation of Shein in BHV, which has strained the project and its financing, as well as the accelerated exit of brands from the department store, denouncing non-payments and problems with the management group. The departure of Banque des Territoires from the initial backing, following the public reaction to the agreement with the platform, and the break-up of Galeries Lafayette with SGM in the management of department stores in small provinces have left the property in the spotlight.

Added to this pressure is the political dimension. The building is opposite Paris City Hall and, according to the French press, the city council has positioned itself to be able to submit a bid if the asset is put back on the market, with an estimated valuation of around €300 million.

With this “plan B”, Galeries Lafayette seeks to monetize a prime property without altering, on paper, the operational continuity of the department store. If the transaction closes in January, the future of the BHV will be marked by the commercial evolution, still under reputational noise, and the real estate, increasingly exposed to institutional scrutiny.