When Selfridge's head of fashion, Miss Bunting, is caught red-handed stealing the store's finest silks and lace from the shop floor, Harry dismisses her on the spot. He cannot tolerate theft, and takes it very personally.
The drunken, deadbeat Reg, who has tracked down Agnes and George at their home, rattles and knocks at their locked door. Intoxicated and belligerent, he won't be gotten rid of easily. Meanwhile, Harry takes Rose and Rosalie to Lady Mae's to see a private performance of the much-celebrated Russian ballerina, Anna Pavlova. Rose is truly enchanted by her exquisite performance, uttering her wish that every woman could have a "Pavlova moment." Spotting an opportunity, Harry mingles and meets the prima ballerina, graciously offering her a private tour of the store. She agrees, a great coup for him.
In her flat, Ellen has worked herself into a frenzy wondering why Harry hasn't been responding to her letters. She tells Frank how he's been ignoring her, but then confides her utter conviction that Harry has been "putting down roots" with her in the flat. The scale of her delusion hits Frank hard.
In the wake of Miss Bunting's departure, Harry appoints a new head of fashion, freshly‐poached from Harrods, Miss Irene Ravillious. Always forward thinking, Harry has decided to put ladies' fashion to be at the heart of the business. It doesn't take long for the self-assured, no-nonsense Miss Ravillious to clash with Miss Mardle.
Inspired by Rose's desire that every woman have a "Pavlova moment," Harry has arranged for the celebrity to visit the store. His family is thrilled and Rose even more so, as Harry has organized a special afternoon tea with Pavlova for her to attend. Their excitement is mirrored in the store, where Harry wants every department to maximize the impact of Pavlova's visit. Much to Miss Mardle's fury, Miss Ravillious orders a battalion of seamstresses to add delicate white piping to the store's black capes – a direct emulation of Pavlova's chic style – and a bit of a tread on Miss Mardle's toes as the head of accessories.
Down at the loading bay, the savvy and observant Victor has noticed that George is unloading an unmarked livery van. He worries that the innocent and naïve George might be inadvertently involved in something dodgy. In the store, Pavlova is greeted by customers and staff in total awe. But the frantic Ellen, barely able to contain her jealousy at not being invited to the event, makes preparations to make an appearance at the store. Frank urges her off but she will not be deterred; she is the Spirit of Selfridges, after all. Meanwhile, Rose has neglected her tea with Pavlova. After a modeling session for her portrait, she accompanies Roddy in an impromptu sojourn to the bohemian Chelsea Arts Club. But when the rowdy group of artists start to make their way to Selfridges, of all places, to see the wonderful Anna Pavlova in the flesh, Rose is forced reveal her true identity to Roddy. Feeling angry and betrayed, Roddy takes it badly. Worse, their impassioned exchange is overheard by Tony, Lady Mae's sullen young lover.
During Pavlova's tour of the store, Ellen arrives and causes havoc as she vies for the attention of the press and, of course, Harry, who has to improvise his way through the awkwardness. Rose still hasn't turned up, and just when things seem like they couldn't get any worse, a drunken Reg wanders into the store. His actions expose Agnes and leave her utterly humiliated. She leaves, feeling that she has no choice but to surrender her dream job in the store.
When Harry proclaims that Pavlova will have her own dedicated window, it tips Ellen over the edge. Harry is forced to remove her from the store and terminates her contract with Selfridges with immediate effect. The Spirit of Selfridges is no more.