One week on from Shein’s offline debut in France, what is the state of play at BHV Marais?

The image is striking: one week after Shein opened on the sixth floor of the Paris department store, Sandro, Maje, and Claudie Pierlot shut their concessions on the first floor of BHV Marais on November 12. The SMCP group’s brands, the French leader in accessible luxury, are in turn leaving the historic Paris retail landmark. Chief among the reasons: a substantial build-up of unpaid invoices.

The day before, the exit of LVMH houses Dior, Guerlain, and Francis Kurkdjian from the Beauty department over unpaid invoices made waves, first reported by BFM. Over the weekend, Frédéric Merlin, president of Société des Grands Magasins (which operates BHV Marais), posted on Instagram to express his satisfaction, claiming that Shein had drawn some 50,000 visitors.

So, one week on from the opening of the world’s first permanent brick-and-mortar space for Shein, what can be said about the highly publicised arrival of the brand chaired by Donald Tang?

On the first day, a long queue outside and an enthusiastic crowd at the launch underscored French customers’ interest in Shein’s offering. Over the course of the day, the pure player and BHV management claimed to have welcomed more than 7,000 people. While queues at the tills were indeed substantial, as FashionNetwork.com observed, some shoppers noted higher prices than online, as well as discrepancies between in-store and digital prices for identical products. According to internal sources, the average basket is said to have reached €50, for takings of around €57,000 excluding VAT, though they estimate that footfall was lower than the figures announced by management.

SGM’s management set up a separate entity to run the Shein space under a management-lease arrangement, with the aim of using the brand’s pulling power to drive traffic to the other floors. According to sales teams interviewed by FashionNetwork.com on Wednesday, the hoped-for “trickle-down” to the rest of the department store has not materialised.

Worse, last Saturday the department store’s total revenue, excluding Shein and excluding VAT, did not exceed €250,000, according to internal sources, who say it usually ranges between €1 million and €1.2 million.

Contacted by FashionNetwork.com, SGM’s management had not responded by Wednesday evening to our queries about the performance of Shein and of the department store as a whole over the past seven days.

Almost all the brands we spoke to reported a clear decline in business. Understandably, attention has turned to the fallout from Shein’s arrival with a space covering more than 1,000 square metres. Some customers appear to have been put off by the opening: in response, at least twenty brands have decided to withdraw their products from the floors of the Rue de Rivoli store, as was the case last week with Agnès b., Maison Standards, and Banana Moon, which announced their departures.

Indeed, announcements of departures—and other challenges to a continued presence in the department store—have multiplied. These include Armor Lux, Cabaïa, Culture Vintage, Figaret Paris, and Le Slip Français, as well as Maison Lejaby, Maison Pechavy, Maison Serge Lesage, Odaje, Polymères, Rive Droite, Talm, and Toiles de Mayenne. The cosmetics segment is no exception, with the announced or planned departures of Aime, Skin&Out, Saint Michel Parfums, and Essentiels Parfums.

The burden of unpaid bills

However, the Asian giant is not to blame for everything. Mounting unpaid invoices have been a major motivating factor behind the brands’ departures. Employees clearly fear that the exit of major players in beauty and fashion will penalise business throughout the end-of-year period, when around 40% of annual sales are usually generated. They also envisage that these closures could prompt other brands on the store’s various floors to follow suit.

Relations with the brands, some of which have been established for several years, also help explain the poor performance of recent days: with the assortment and merchandising lacking appeal, Parisian customers with substantial purchasing power appear to have gradually turned away from BHV in recent months. It is far from certain that the stopgap solution concocted in haste after Disney cancelled its Christmas window displays will enable the store to turn things around in the next six weeks.

As Galeries Lafayette’s own brands (Louis Pion, Jodhpur, etc.) will soon no longer be offered in the store, the product assortment is a concern among employees. “We can see that customer satisfaction is plummeting,” says a staff representative. “And we fear that Shein is just a test to develop a store focused on low cost.”

For SGM’s management, led by Frédéric Merlin, the urgent focus is undoubtedly elsewhere. He reportedly has until December 19 to finalise the purchase of the BHV Marais building, after his previous project with Banque des Territoires fell through. According to L’Informé, the Lyon-based executive is said to be hopeful of achieving his ambition, having approached US and UK pension funds.

Olivier Guyot, Matthieu Guinebault, and Léa Minerve