Ssense has entered into bankruptcy protection under the direction of its primary lender, seemingly without the agreement of the Montreal-based fashion e-tailer. A representative for Ssense indicated that the lender is attempting to compel a sale of the company in accordance with the Companies’ Creditors Arrangement Act. This development arises during a challenging economic landscape for Ssense, which attributes its struggles to the Trump Administration’s trade policies. These include tariff disturbances and the removal of the U.S. de minimis exemption. Furthermore, Ssense has faced an industry-wide slowdown in the luxury market, leading to persistent double-digit declines in sales.
A statement from Ssense outlines, “Over the past several months, we have diligently worked in good faith with our financing partners to establish an agreement aimed at recapitalizing and restructuring our business amidst the substantial economic challenges facing the retail sector, notably due to the elimination of the U.S. de minimis exemption.” The statement further expresses disappointment, stating, “While we sought a collaborative pathway forward, our primary lender has opted to unilaterally place the company under CCAA protection and initiate a sale process without our consent. This decision is deeply disappointing and we believe it does not align with the long-term interests of our over 1,000 employees, vendors, and partners.”
In light of these developments, the spokesperson confirmed that Ssense plans to submit its own application for CCAA protection in an effort to “safeguard the company, maintain control over our assets and operations, and advocate for the future of this business.”
In May, the retailer reportedly implemented layoffs affecting approximately 8% of its workforce, in addition to reducing parental leave benefits and instituting a freeze on bonuses, all aimed at addressing declining cash flow. Nonetheless, despite these hurdles, the company continues to harbor optimism regarding its potential for recovery and regaining its market position.
“Our mission is more relevant than ever: to discover and promote emerging creative talent,” stated the spokesperson. “With a dedicated global customer base, robust brand recognition, and the resilience inherent in our digital-first model, we maintain confidence in the fundamental strength of our business. This restructuring process will provide the necessary time and stability to reshape our operations on our terms, protect the interests of our employees and partners, and emerge stronger in the future.”
The news surrounding Ssense arrives at a turbulent time for multibrand luxury retail. Last year, Matches shut down operations, while South Korean e-commerce giant Coupang acquired Farfetch. This year has seen Italian retailer Luisaviaroma file for court protection, and Mytheresa successfully concluded its acquisition of Yoox Net-a-Porter.
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