Shein enters bricks-and-mortar retail in France, sparking backlash

Core Points - Shein plans to open its first physical stores in France in November, partnering with Société des Grands Magasins, which has drawn criticism from local retailers [1][4] - The new stores will be located in BHV and Galeries Lafayette department stores across several French cities, marking a significant shift from Shein's previous pop-up marketing strategy [1][2] - French retailers, including Galeries Lafayette, oppose the move, citing it as a violation of franchise agreements and a contradiction to their brand values [2][3] Industry Context - Shein's pricing strategy includes selling dresses for 12 euros and jeans for 20 euros, which has intensified competition among French retailers already struggling against brands like Zara and H&M [4][5] - The fast-fashion sector in France is facing regulatory scrutiny, with lawmakers proposing a draft law that could restrict Shein's advertising practices [4] - Several French fast-fashion brands, such as Jennyfer and NafNaf, have entered insolvency proceedings, highlighting the challenges within the industry [6] Business Model Implications - Shein's current business model relies on direct shipping from factories in China, allowing for low inventory levels and minimal unsold stock [7] - Transitioning to physical stores will require Shein to maintain inventory, which could increase operational costs and alter its successful online-only strategy [8]