By Alessandro Parodi, Helen Reid and Mimosa Spencer
PARIS (Reuters) – Shein’s move to the flagship BHV in Paris has added political heat to the woes of department stores, which face an existential threat from a shift of shoppers to online retailers offering ultra-fast fashion.
The Chinese budget retailer opened its first brick-and-mortar store in the BHV department store on Rue de Rivoli in central Paris earlier this month, sparking an outcry from lawmakers and other retailers, who say Shein’s low-cost business model has hurt French shopping streets.
For BHV, known for its wide range of goods, the move was an attempt to attract younger shoppers, who have become big fans of online platforms like Shein for everything from cosmetics to fashion.
The growth of the internet has added to the woes of department stores around the world, many of which are still trying to recover from a huge drop in footfall during the pandemic.
NEW THREAT FROM ULTRA-FAST FASHION
“Before, our competitors were other local department stores. Then came competition from websites,” said Laetitia Henry, general manager of Printemps Haussmann flagship store in Paris.
“More recently, we have been facing a new international threat in the form of ultra-fast fashion, which can copy a designer dress in three weeks and sell it for less than 10% of the price.”
In the United States, Macy’s is closing stores while Saks Global, parent of upscale department store chain Saks Fifth Avenue, is exploring divestments to reduce debt.
Société des Grands Magasins, which bought BHV from the Galeries Lafayette group two years ago, is hoping that its partnership with Shein is the kind of innovation that will protect it.
SGM said that traffic in the BHV store jumped by 50% on the day of Shein’s launch, and that a quarter of people who bought from Shein also went on to make another purchase from BHV.
Shein last month said that top global fashion market France was a “natural choice” to test brick-and-mortar stores, and that its online sales allow it to accurately predict what local consumers want.
Shein did not immediately respond to a request for comment.
DEPARTMENT STORES GET CREATIVE TO ATTRACT SHOPPERS
other French department stores such as Printemps, Galeries Lafayette and Le Bon Marché, owned by LVMH, have tried to reinvent themselves as lifestyle destinations, offering luxury experiences tailored to attract more shoppers.
Le Bon Marché schedules regular events, including concerts and dances, while Printemps offers fine dining, beauty treatments and has an in-store ice rink during the festive season.
“The idea is always to give customers a reason to come,” Henry said.
Galeries Lafayette said more than 100 million euros ($115.06 million) invested in renovations during the pandemic, including to fix the stained glass dome of its Paris flagship store, helped it attract more visitors and take its foot traffic to higher levels than in 2019.
But mid-range stores, which are struggling to adapt and enter the crowded market for luxury experiences, will be seeing the publicity that Shein has generated for BHV, said Selvane Mohandas du Ménil, managing director of the International Association of Department Stores.
He said everyone will be curious about how much traffic and overspending will trickle down to other parts of the store.
Late payments to brands at BHV have led to product shortages, hurting sales and leaving workers concerned for their jobs, a union representative said in November.
Overall foot traffic across French retail is still below pre-pandemic levels and increased by just 0.2% in the first nine months of this year, according to France’s Alliance du Commerce.
“Every day we hear that physical retail is dying, every day they tell us that thousands of jobs are at risk,” SGM president Frederic Merlin told France’s BFM TV the day Shein’s store opened.
Merlin said he welcomed the criticism, “but trying to move forward is better”, arguing that retailers should work with new models like Shein’s.
SGM has delayed the opening of five more Shein stores in department stores across France to adjust its marketing strategy. When Shein’s store opened some shoppers found his prices too high.
Those stores were branded Galeries Lafayette under a franchise agreement, but will take the BHV name after Galeries Lafayette ended its agreement with SGM.
Paris city hall said it would not allow BHV to host outdoor Christmas events this year due to a “very controversial context”.
When Shein’s Paris store opened, France suspended its French market after finding child-like sex dolls for sale on the platform. The suspension proceedings were stopped after Shein withdrew all the illicit products.
The backlash against Shein has also tipped the scales in a European debate over customs duties on low-value packages, which are expected to come in by 2026 – hitting Chinese retailers such as Shein and Temu – in line with a similar suspension of duty-free treatment in the US for small packages.
“Shein is really a traffic driver for big stores… or you just kill yourself… That’s a big question that everyone is looking at now,” said Mohandas du Menil.
($1 = 0.8691 euro)
(Reporting by Alessandro Parodi and Mimosa Spencer in Paris, Helen Reid in London; Editing by Dominique Patton, Lisa Jucca and Jane Merriman)
