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The year's 1900, and a dapper gentleman named Honoré Lachaille strolls through a beautiful Paris park, introducing us to the current state of love: it's a game played carefully by women and men alike. Everyone cheats on everyone, and marriage is a cat-and-mouse situation where women want financial security and men simply don't want to be tied down. Honoré is part of this even at his advanced age, and he sings "Thank Heaven for Little Girls," perhaps the most famous (and, to some ears, creepy) tune from this musical. He admires beautiful things, he says, "not antiques, mind you." He points to a laughing, playful young tomboy named Gigi.
She's the star of this story.
Gigi (short for Gilberte and pronounced "zhee-zhee") lives with her mother and grandmother, Madame Alvarez. As she gets older, Gigi starts to take finishing lessons from her Aunt Alicia, her grandmama's sis and a fading beauty who hasn't left her beautiful apartment in years. Gigi finds these lessons about gemstones and cigars confusing and boring, ditto love and sex. She just wants to have fun. She doesn't know she's being groomed to become a courtesan, just like her grandmama and aunt were.
While the two old ladies are doing their best to train up a proper young lady who will one day be a well-kept mistress, Honoré's nephew Gaston, a thirtyish sugar tycoon, has a case of the Mondays every day. Everything is so boring—all the women, the endless parties and dinners, the cars, the clothes. Who can stand it?
For diversion, he likes to go to his friend Madame Alvarez's shabby apartment, drink her chamomile tea, and and tease Gigi, exclaiming that he has "a better time with this outrageous brat [...] than anyone in Paris!"
Meanwhile, Gaston's getting suspicious about his current mistress Liane, and for good reason: she's having an affair with her ice skating instructor. At Honoré's advice, Gaston confronts them, paying off the skater and putting him on the next train out of town. Liane makes a suicide attempt "with insufficient poison," and it's played for laughs.
To preserve his public image, Gaston spends the next several weeks making headlines in the society pages, buying out the opera and hosting party after party. But he's still bored, bored, bored.
Chez Madame Alvarez, he begins to notice that Gigi's started to grow from a girl to a young woman. Instead of asking for candy, she wants to go with Gaston to the beach since she's never seen the ocean. They go with Madame Alvarez, and have a grand old time. Grandmama runs into Honoré there as well, and it's revealed that they were once lovers, though they cheated on each other and have both ended up alone.
Back in Paris, Gaston heads to Monte Carlo to think about things. He thinks he may be falling in love with Gigi, and returns home to make business arrangements with Madame Alvarez so that he can begin taking care of Gigi in a "grand fashion." This includes dating her and sharing a bed, a typical arrangement for a wealthy man and his mistress. It's not made explicit, though. The movie soft-pedals the whole sexual angle.
Madame Alvarez consents, but Gigi finds it unbearable to think of being with Gaston and being scrutinized by all of Parisian society. She's well aware of Gaston's reputation and knows she'll be thrown out when the next girl comes along and made to find another lover. To Madame Alvarez and Aunt Alicia's embarrassment, Gigi turns down Gaston's offer. Gaston leaves in a huff and Honoré advises him to ignore the girl and go on living his life. But when Gaston receives a note from Gigi saying she'll accept, he rushes back to her apartment. Gigi sadly tells him she'd rather be miserable with him than without him.
That evening, the two go out, and Gigi acts like too-proper a lady, doing everything just as Liane would. Gaston's angry and bored. He worries she's lost her feisty spark, everything that made her different. He hates seeing all the eyes on them. He drags her out of the restaurant and drops her off at home. In the darkening Paris streets, Gaston realizes that by asking Gigi to be a kept woman, he hasn't been honoring his real love for her. He returns to the apartment and asks Madame Alvarez for Gigi's hand in marriage.
In the final scene, Honoré—back in the park full of ladies of all ages—reminds us of the cycle of womanhood. Gigi, grown-up and at-ease, strolls arm-in-arm with Gaston. Little girls run by. Honoré smiles at us, and this is the happy ending.