Paris City Hall eyes BHV as its boss comes under fire

With three days to go before a crucial deadline for BHV, Paris City Hall on Tuesday signalled its interest in the department store’s building, intensifying pressure on its boss, who is embroiled in the Shein controversy, as well as employees’ “uncertainty” about their future.

“At a time when the situation at BHV is causing very serious concern for jobs and for the future of central Paris, I wanted the city to equip itself to act pre-emptively,” declared Socialist mayor Anne Hidalgo at the Paris Council, which is due to adopt a motion to this effect.

If the owner of BHV were to “vacate the premises”, the city would “explore all options to put itself in a position to acquire the building in order to safeguard commercial activity and jobs, while enabling the development of a mixed-use scheme also including social and affordable housing”, the executive’s motion states.

The Société des Grands Magasins (SGM), which has owned the Bazar de l’Hôtel de Ville (BHV) retail business since 2023, also wants to buy the building from the Galeries Lafayette group, as the two parties are bound by a sale agreement that expires on Friday. However, SGM co-founder Frédéric Merlin caused an uproar in early October by announcing the opening, within BHV, of the first physical Shein store, an Asian ultra-fast-fashion brand accused of numerous ills such as unfair competition, and pollution.

“Investment funds”

The Banque des Territoires, an entity of the Caisse des Dépôts (CDC), has withdrawn from negotiations begun in June with SGM to help it purchase the building, citing “a breakdown of trust.”

Numerous brands including Dior, Sandro, and Guerlain have also left BHV in recent months, due to mounting unpaid bills or opposition to Shein.

All of which further complicates the task of Merlin, who is supposed to have completed his funding round on December 19.

“On that date, exclusivity lapses and we reserve the right to explore all the options open to us,” a Galeries Lafayette spokeswoman told AFP.

Refusing to see its name associated with Shein, the group has also terminated its contract with SGM covering seven provincial stores – rebranded BHV. For its part, SGM says the project is “moving forward” and “should be finalised in the coming days or weeks.”

Appearing before the National Assembly at the end of November, Merlin referred to “extremely precise discussions” with foreign, non-Chinese “investment funds.”

Against this backdrop, Nicolas Bonnet-Oulaldj, the deputy mayor responsible for commerce, told AFP that City Hall was ready to “step in” from Friday.

300 million euros

Given the amount involved – 300 million euros, according to him – the city would not buy on its own but via, for example, a semi-public company with private shareholders, says Bonnet-Oulaldj, who would like to make it “a showcase for brands made in Paris and in France, and for young designers.”

Building housing would require a modification of the PLU (local urban plan), as the plot is “classified as a department store.”

This “announcement adds further uncertainty to the future of BHV”, which directly employs some 750 staff, its inter-union alliance responded, asking “to be received as soon as possible by Paris City Hall.”

“The future of BHV depends not only on the finalisation of the acquisition of the building” but also “on the continuity of commercial operations”, it warned, expressing alarm at the “dire situation” of the store, where Shein sales are “nowhere near making up for the shortfall across the rest of the store.”

Hidalgo’s surprise announcement drew criticism from the right. Aurélien Véron (LR), spokesman for Rachida Dati’s group on the Paris Council, condemned it as an “improvised PR stunt”, three months ahead of the municipal elections.

Recently, Merlin set out his plans in LSA magazine, including a new payment system for suppliers. But “nobody believes it”, scoffed Guillaume Nusse, CEO of Clairefontaine-Rhodia, which pulled out of BHV over “unpaid bills and broken promises,” speaking to AFP.