Amid turmoil over its alliance with Shein and after being dropped by the Banque des Territoires, BHV’s operator denounces “political pressure” and maintains it can complete the purchase of the freehold of the Paris department store.

Since June 4, Société des Grands Magasins (SGM) and the Banque des Territoires, an entity of Caisse des Dépôts (CDC), had been negotiating “the creation of a joint property company to acquire the freehold” of the iconic Bazar de l’Hôtel de Ville, which is owned by Galeries Lafayette and valued at €300 million, according to Challenges magazine.

SGM had already acquired the BHV retail business from Galeries Lafayette in 2023.

However, the October 1 announcement by Asian fast-fashion platform Shein and SGM of an alliance to open six physical shops progressively, including one inside BHV Marais in central Paris, cast doubt on the ongoing property negotiations.

“The Banque des Territoires learned of this partnership through the press, without any prior notice, resulting in a breakdown of trust between the two parties,” the public body said in a statement sent to AFP on Wednesday, announcing “the end of negotiations with SGM.”

Shein is a “company whose model does not align with the values and mission of the Banque des Territoires,” it added.

In November, ultra-fast-fashion brand Shein is scheduled to open a permanent space on the sixth floor of the department store, which first opened in 1856 in the heart of Paris, as well as in five Galeries Lafayette stores in the regions.

Until now, Shein has sold its products only online or through pop-up shops.

Shein declined to comment on the Banque des Territoires statement.

“Other partners have confirmed their commitment.”

The decision by the Banque des Territoires, which came after criticism of Shein by French ready-to-wear advocates and political leaders, sparked an immediate backlash.

“The CDC is a partner that came under strong pressure following the announcement of the partnership and gave in to political pressure. They will face the consequences,” SGM said in a statement sent to AFP.

SGM also expressed confidence in continuing the real estate project.

“The plan to acquire the freehold will go ahead, SGM having other partners who have confirmed their commitment and who support the initiative to revitalise and modernise BHV’s offer,” the property company said, declining to disclose any names at this stage.

Beyond this controversy, BHV is facing financial strain and has been abandoned by numerous brands due to unpaid invoices, as reported by Fashion Network last weekend. Regarding these disputes, SGM had previously assured AFP that the payment delays, amounting to several million euros, were temporary and due to the rollout of a new automated accounting system. The partnership with Shein, however, led to an increase in brand departures. Following the announcement, several French brands decided to exit the department store.

Paris, October 8, 2025 (AFP)