Shein's Bricks-and-Mortar Debut in France Sparks Backlash
Online fast-fashion retailer Shein is planning to open its first physical stores in France in November, partnering with Société des Grands Magasins (SGM). This move has drawn criticism from French retailers and officials who are concerned about its impact on local businesses and sustainability.
Shein's Expansion into Physical Retail
The new stores will be located within the BHV department store in central Paris and at Galeries Lafayette department stores in five other French cities: Dijon, Grenoble, Reims, Limoges, and Angers. This represents a significant shift for Shein, which has primarily operated through temporary pop-up shops until now. SGM president Frédéric Merlin believes the partnership will attract a younger clientele, potentially combining Shein purchases with high-end designer items.
Controversy and Opposition
Galeries Lafayette has voiced strong opposition to the deal, claiming it violates their franchise agreement with SGM and contradicts their brand values. In a statement, they said they "profoundly disagree 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 has also criticized the move, arguing that it undermines efforts to promote "sustainable local commerce". Yann Rivoallan, head of fashion retail association Fédération Francaise du Pret-a-Porter, expressed concern that Shein would "flood our market even more massively with disposable products."
Challenges and Implications
Shein's business model relies on direct shipments from factories in China, benefiting from duty exemptions for low-value e-commerce parcels. Setting up physical stores will require maintaining inventory and increasing operational costs, a departure from their online-only strategy. Furthermore, Shein faces increasing regulatory scrutiny, including a proposed law in France that could ban the company from advertising. The company is also adapting to the end of the "de minimis" duty exemption in the U.S., its largest market, with the EU also planning similar measures. According to Executive Chairman Donald Tang, Shein is especially popular in provincial and rural areas where customers have fewer options for fashionable clothes.
Competitive Landscape and Financial Strain
French retailers have been struggling to compete with the fast-fashion giants Zara and H&M, with Shein's arrival further intensifying the competition. Several French fast-fashion retailers, including Jennyfer and NafNaf, have entered insolvency proceedings this year.
