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Canadian retailer and indie fashion favourite Ssense has filed for bankruptcy protection, the company said on Thursday.
The company is filing an application with Canada’s Companies’ Creditors Arrangement Act, similar to filing for Chapter 11 bankruptcy in the US. The CCAA is a federal law that allows insolvent corporations owing creditors more than $5 million to restructure debts under a legal framework while continuing operations. The filing comes after Ssense’s primary lender placed the company under CCAA protection, triggering a sales process “without our consent”, according to an Ssense spokesperson.
“We are deeply disappointed in this decision, which we believe does not serve the long-term interests of our 1,000+ employees, vendors and partners,” the spokesperson said. “We will be filing our own CCAA application to safeguard the company, retain control of our assets and operations and fight for the future of this business.”
Ssense has been hit hard by the global trade war triggered earlier this year by the Trump administration’s trade policies, and the company attributed the bankruptcy filing directly to higher costs incurred in light of the new policy. As of 1 August, Canada faces a 35 per cent tariff on goods shipped into the US, with some exemptions — a higher rate than Mexico, at 25 per cent, and China, currently at 30 per cent. Also eating into Ssense’s bottom line and hitting the company hard is the closing of the de minimis loophole this Friday, after which packages under $800 in value entering the US will be subject to duties.
“Over the past several months, we have worked tirelessly and in good faith with our financing partners to secure an agreement that would recapitalise and restructure the business in light of significant economic headwinds facing the retail sector, including the elimination of the US de minimis exemption,” the spokesperson said.
News that the de minimis loophole would be coming to an end, on top of the spiked tariff rates on Canada earlier this year, prompted customers to lament their Ssense hauls, particularly from the retailer’s beloved biannual sales. By April, some customers reported getting hit with duties after ordering cross-border shipments from the retailer.
It’s not just tariffs. Multi-brand luxury retail as a whole has struggled to stay afloat after post-pandemic revenge spending dried up. Earlier this month, Italian retailer Luisaviaroma filed for court protection, facing insolvency thanks to increased operating costs and missteps. Matches shuttered last year, while Farfetch was sold in a fire sale to Korean retailer Coupang. Two major players consolidated when Mytheresa closed the acquisition of Yoox Net-a-Porter earlier this year. Ssense has not been immune to the challenges the category faces, from diminished customer spending power to high costs of operations. The company laid off 100 employees in May, or 8 per cent of the workforce — the third round of layoffs in the past year.
If Ssense were to fail, it would be another blow dealt to fashion’s independent designer brands, many of whom rely on Ssense as a retail partner. During the past few tumultuous years for luxury retail, Ssense – founded in 2003 by CEO Rami Atallah and his brothers, Bassel and Firas – has emerged as a champion of small designer brands and go-to wholesale partner for young brands’ first orders. From here, Ssense’s fate depends on how the CCAA filing plays out.
“Our mission is more relevant than ever: to discover and champion emerging creative talent. With a loyal global customer base, strong brand recognition, and the resilience of a digital-first model, we believe in the fundamental strength of our business,” the spokesperson said. “This process will give us the time and stability we need to restructure on our terms, protect the interests of our employees and partners, and emerge stronger for the future.”
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