French department store operator dropped by investment bank following Shein collab

French department store operator Société des grands magasins (SGM) has seen its deal to acquire the property of the Parisian department store BHV Marais collapse after its new partner, fast fashion giant Shein, caused the withdrawal of a key state-backed investor. SGM, which operates BHV, has condemned what it calls “political pressure” but maintains it can complete the acquisition.

SGM and the Banque des Territoires, an entity of the French public sector financial institution Caisse des dépôts (CDC), had been in negotiations since June 4. The discussions centred on creating a joint property company to acquire the BHV building from its owner, Galeries Lafayette, a transaction valued at 300 million euros, according to industry reports. This followed SGM's acquisition of the BHV business operations from Galeries Lafayette in 2023.

However, the property negotiations were jeopardised by an announcement on October 1 detailing an alliance between Singapore-based Shein and SGM. The partnership includes plans to open six physical Shein stores in France, with one slated for a space within the BHV Marais store itself.

“The Banque des Territoires learned of this partnership through the press, without any prior information, consequently leading to a breakdown of trust between the two parties,” the public entity stated in a press release sent to AFP on Wednesday, announcing “the end of negotiations with SGM”.

The bank added that Shein is a “company whose model does not align with the values of the Banque des Territoires.”

The ultra-fast fashion brand is set to establish a permanent presence on the sixth floor of the historic Parisian store next month. The plans also include openings in five other Galeries Lafayette stores in provincial France, marking a significant move into brick-and-mortar retail for Shein, which has until now sold its products online or through temporary pop-up shops.

Shein declined to comment on the statement from the Banque des Territoires.

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