Online fast-fashion retailer Shein will open its first permanent physical shops in France in Nov., partnering with department store owner Société des Grands Magasins. This expansion has immediately drawn criticism from French retailers and officials.
The stores will be located in the BHV department store in central Paris and five Galeries Lafayette department stores in other French cities. Previously, Shein had only hosted temporary marketing-driven pop-ups around the world.
The first store, on the sixth floor of the BHV, is scheduled to open in early Nov. Later openings are planned in Galeries Lafayette department stores in Dijon, Grenoble, Reims, Limoges, and Angers.
Frédéric Merlin, SGM president, stated the launch aims to attract a younger clientele. He suggested a customer might purchase a Shein item and a designer handbag on the same day.
Galeries Lafayette, which sold the stores operated by SGM under its name through a franchise agreement, stated its opposition to the decision. The group indicated the move would violate their agreement and plans to prevent it.
The group stated, “Galeries Lafayette profoundly disagrees with this decision with regards to the positioning and practices of this ultra fast fashion brand that is in contradiction with its offer and values.”
Paris Mayor Anne Hidalgo criticised the decision, asserting it conflicts with Paris' broader goals of promoting sustainable local commerce. She mentioned supporting local businesses and locally-made goods.
Ms. Hidalgo wrote on LinkedIn that the city was "extremely concerned by BHV's decision to host, in November, the first permanent store of the Shein company in France."
Yann Rivoallan, head of fashion retail association Fédération Francaise du Pret-a-Porter, also commented on the development. He stated that "In front of the Paris City Hall, they are creating the new Shein megastore, which – after destroying dozens of French brands – aims to flood our market even more massively with disposable products."
Shein, which sells 12-euro dresses and 20-euro jeans, faces pressure from other retailers, politicians, and regulators in France. Lawmakers have backed a draft law regulating fast fashion.
If implemented, this draft law would ban Shein from advertising. Several French fast-fashion retailers, including Jennyfer and NafNaf, entered insolvency proceedings earlier this year.
Shein's business model relies on sending parcels directly from factories in China to shoppers globally. This benefits from customs rules that provide low-value e-commerce parcels an exemption from duties.
Shein executives have attributed its success to an online-only business model, which means it maintains little unsold inventory. Establishing physical stores represents a significant departure from this approach.
Physical stores will require the company to maintain inventory in brick-and-mortar locations, which will add to running costs. This expansion occurs as Shein adapts to changes in its largest market, the U.S.
The "de minimis" duty exemption for low-value parcels is ending in the U.S., with the European Union planning a similar change.
Donald Tang, Shein Executive Chairman, has noted in interviews that Shein is particularly popular in provincial and rural areas. He stated customers in these regions often have fewer options for fashionable clothes.
Shein is opening its first permanent physical stores in France starting in Nov.
The stores will be in Paris' BHV department store and Galeries Lafayette locations across five other cities.
This expansion has been criticised by Galeries Lafayette, Paris Mayor Anne Hidalgo, and French retail associations.
Source: REUTERS
