BHV Boss Defends Controversial Shein Alliance Despite Backlash and Underestimation Admission

Under fire since his alliance with Shein, Frédéric Merlin, the young head of BHV whose rise has been meteoric, admits he "underestimated" the challenge posed by the Paris department store. However, he stands by his strategy, which he insists is intended to "keep retail alive." The executive recently stated during an interview on the sixth floor of the Bazar de l'Hôtel de Ville that he always tries to be humble, because "at 34, you don't know everything."

It is in this same department store that Shein, the Asian e-commerce giant accused of unfair competition and environmental pollution, is set to open its first permanent shop under an agreement with Merlin's company, Société des Grands Magasins (SGM). Founded in 2021 by Frédéric Merlin and his sister, Maryline, SGM, which acquired the BHV business in 2023, also operates a dozen shopping centres and seven Galeries Lafayette stores in the provinces, five of which are slated to host Shein.

In his defense of the controversial move, Merlin denounces the "surrounding hypocrisy" in the face of Shein and its many consumers. He also admits he underestimated "all the political and media attention that comes with taking on this Paris monument right opposite City Hall." Despite the turmoil, Merlin asserts that he has made BHV profitable and works "14 hours a day" to manage operations. Regarding supplier issues, Merlin attributes a buildup of unpaid invoices to "tools" issues that are being resolved, rather than cash-flow problems.

The alliance with Shein has prompted significant backlash. Several brands have announced they are leaving the Paris department store in protest. SGM has also been dropped by Banque des Territoires (an entity of Caisse des Dépôts et Consignations) for the acquisition of the BHV building, and excluded from the Union du grand commerce de centre-ville (UCV). Additionally, the Galeries Lafayette group refuses to allow Shein to set up in stores bearing its name.

Merlin's critics have been vocal in their condemnation. Nicolas Bonnet-Oulaldj, the deputy mayor of Paris in charge of commerce, claims Merlin "is not collaborative" and falsely told people he had the support of Anne Hidalgo regarding Shein. Yann Rivoallan, president of the Fédération Française du Prêt-à-Porter Féminin, went further, questioning, "Who would want to work with a pathological liar?" The inter-union body of the department store also noted that Merlin "didn't realise he was taking on 'an ocean liner'."

Hailing from the Lyon region, Merlin was raised by a father who ran a small industrial piping business and a stay-at-home mother. After a brief period at law school, he obtained a BTS in property, having been drawn to the profession during a placement. With "self-confidence" and "entrepreneurial drive" instilled by his family, Merlin, along with his sister, founded a commercial property consultancy (IMEA) at the age of 20, using a €15,000 student loan. They later launched another consultancy, ADI, in 2014, specializing in the redevelopment of commercial buildings.

The Merlins launched SGM in 2018, focusing on turning around shopping centers that nobody wanted any more in towns such as Roubaix or Mulhouse. Their father, who brought "industrial rigour," worked for the siblings until his death in 2018. Fabrice Fubert, co-director of a commercial property consultancy, describes Merlin as "an audacious man who takes risks and shakes things up," noting his innovative approach in bringing pop-up shops like Pokémon and YouTuber Squeezie to BHV. Fubert, who suggested in 2021 that Merlin acquire seven Galeries Lafayette stores, further characterized Merlin as not being "from the establishment."

Merlin's fortune, shared with his sister, is estimated at €600 million, ranking them 233rd in France, according to Challenges. Their success has been backed by businessman Jean-Paul Dufour, who holds a 42.5% stake in the majority of SGM's subsidiaries. Merlin, the father of a young boy, asserts his role as "head of the family," putting himself on the front line to "protect" his sister and his mother, Dominique, who serves as SGM's deputy managing director.