BHV Marais Brands Revolt Over Unpaid Invoices and Shein Partnership

A deep-seated discontent has been brewing at BHV Marais, the historic Parisian department store on Rue de Rivoli. This simmering tension escalated significantly with the recent announcement that ultra-fast fashion giant Shein would occupy a floor in November, exacerbating an existing rift between numerous brands and the store's management. For months, brands and suppliers operating within BHV, which was acquired by the Merlin family’s Société des Grands Magasins (SGM) from the Galeries Lafayette group in 2023, have reported struggling with substantial unpaid invoices.

The dissatisfaction, though widespread, had largely been confined to behind-the-scenes negotiations until October 1st. Store management had offered sporadic reassurances to partners and, according to reports, settled a portion of the outstanding sums. Brands, while increasingly frustrated, generally kept their financial difficulties and concerns about BHV Marais’ future strategy private. However, a clumsy email sent in mid-September by the sales department, which inadvertently revealed individual addresses to all recipients, further ignited the situation. This misstep reportedly prompted dozens of brands to unite and share their experiences, aiming to collectively pressure the department store’s management.

The public announcement of Shein’s imminent arrival, taking over more than 1,000 square metres on the sixth floor, marked a definitive shift from private grumbling to overt anger. Many French labels are now openly expressing their dismay. Guillaume Gibault, founder of the underwear brand Le Slip Français, revealed his company's decision to withdraw from BHV prior to the Shein announcement. Citing consistent unpaid invoices since SGM’s takeover, Gibault explained, "You make your sales, you pay your staff… but you don’t receive your revenue. When it becomes that widespread, it looks like a modus operandi." He affirmed his brand's decision to pull out was justified by the subsequent Shein partnership.

The core of the brands' grievances lies in these persistent payment delays. The Union Française des Industries de la Mode et de l’Habillement estimates over €7 million in unpaid invoices, a figure that doesn't include amounts owed to many international groups who have remained discreet. Numerous brands interviewed by FashionNetwork.com confirm they've received no information regarding outstanding payments since July. Guillaume Alcan, founder of Odaje, recounted attempts to negotiate payment plans for sums up to €100,000, which were repeatedly dishonoured, ultimately leading to his brand's departure.

Xavier Martin, working to relaunch the lingerie brand Maison Lejaby, shared similar frustrations. He criticised BHV’s management, stating, "If the unpaid invoices are intentional, then this practice is purely dishonest. Otherwise it’s incompetence." Maison Lejaby also withdrew on October 1st, the day Shein’s arrival was announced. Martin observed widespread dismay among brands, many of whom operate in sectors antithetical to fast fashion. He fears that any potential increase in foot traffic due to Shein would ultimately be detrimental to existing brands.

In response to these accusations, BHV, contacted by FashionNetwork, asserted that it is engaging in discussions with brands and suppliers to clarify its new concept. SGM also claims that some current partners have welcomed Shein's integration and attributes the payment issues to an IT problem expected to be resolved in October or November. However, for many, patience has worn thin, especially amidst a perceived lack of clarity regarding BHV’s broader commercial strategy, including the upcoming closure of the Homme building and consolidation of menswear.

Shein's arrival proved to be the decisive catalyst for several brands. The founder of the beauty brand AIME announced on LinkedIn their intention to withdraw, stating that the decision "does not correspond to our values or to what we stand for: a more responsible fashion and beauty industry." Antoine Tinel of retail agency The Lifestyle Company also confirmed their decision not to renew contracts for brands like Ipanema and Barbour, citing Shein’s presence as a final confirmation of their doubts. Frédéric Merlin of SGM, while acknowledging potential reshaping, maintains Shein’s entry is an opportunity to attract mass customers to BHV, describing it as a "gamble."

This "gamble" is further complicated by SGM’s ongoing efforts to secure bank financing for the purchase of the BHV premises. The agreement with Shein now threatens to derail these crucial negotiations. SGM had previously entered exclusive discussions with Banque des Territoires (BDT), a public financing vehicle, to secure a strategic partner and bring in other banking institutions. However, BDT, which directly depends on Caisse des Dépôts, has expressed strong disapproval of the Shein partnership, citing its commitment to "supporting a responsible, local economy, promoting ecological transition and assisting local authorities and players in the field in their positive-impact projects."

The issue has also drawn political attention, with MPs Olivia Grégoire and Antoine Vermorel-Marques appealing to the Prime Minister to accelerate "anti-fast-fashion" legislation and urging Caisse des Dépôts not to support SGM’s project. Grégoire denounced Shein’s presence as "a betrayal of the heritage of our couturiers and a denial of our history," affirming BDT’s commitment to not fund operations contrary to its mission. Despite mounting pressure, SGM reiterates its commitment to revitalising its retail spaces, seeking to explain the "reality and the positive implications" of the partnership.

While the financial terms of the Shein agreement remain undisclosed, SGM faces a critical juncture. The question looms whether SGM can proceed with its acquisition of the BHV premises without the crucial backing of Banque des Territoires. Reports from Les Echos suggest another potential buyer might emerge, adding another layer of uncertainty. By choosing the Shein card, Frédéric Merlin appears to be engaged in a high-stakes poker game, with the future of a historic Parisian institution and its over 1,000 employees hanging in the balance.