Montreal-based luxury fashion retailer Ssense, known globally for its cutting-edge online platform and designer collections, is on the verge of filing for creditor protection in Canada. The move comes after mounting financial pressures, declining sales, and disputes with lenders have pushed the once-thriving e-commerce brand into a liquidity crisis.
Ssense Faces Liquidity Crisis
Founded in 2003, Ssense quickly became a leading destination for luxury and streetwear fashion, collaborating with hundreds of designer brands and building a loyal global customer base. However, according to multiple reports, the retailer has been grappling with a 28% decline in sales in 2025. This downturn, combined with the end of U.S. duty-free exemptions and rising tariffs, has weakened the company’s financial position.
To protect itself from aggressive creditor actions, Ssense is preparing to seek creditor protection under Canadian law, which is similar to Chapter 11 bankruptcy proceedings in the United States. This legal shield will allow Ssense to restructure its debt, negotiate with lenders, and attempt to stabilize operations.
Disputes with Lenders
Sources familiar with the matter revealed that some of Ssense’s creditors have been pushing for a forced sale of the business. Lenders, concerned about the company’s declining revenues, initiated steps that would have forced Ssense into liquidation. In response, Ssense’s leadership, including CEO Rami Atallah, decided that filing for creditor protection was the most viable path forward to maintain control and preserve the brand’s long-term value.
Industry analysts note that Ssense’s troubles highlight the ongoing volatility in the luxury fashion e-commerce sector. Despite a surge in online shopping during the pandemic, many retailers have struggled with inflation, supply chain costs, and changing consumer habits.
Employee Communication and Future Plans
In an internal email obtained by The Business of Fashion, Atallah informed employees about the filing, assuring them that the company’s priority remains protecting jobs and sustaining operations during the restructuring process. He emphasized that Ssense will continue serving customers worldwide while it negotiates with creditors.
While restructuring, the company is expected to explore options such as refinancing, securing new investment, or potentially bringing in strategic partners. Analysts suggest that a successful turnaround could still be possible if Ssense adapts quickly to market realities and streamlines its operations.
What Went Wrong for Ssense?
The downfall of Ssense can be attributed to several key challenges:
- Tariffs and Trade Issues: The loss of duty-free exemptions in the U.S. significantly raised costs.
- Shifting Consumer Behavior: Younger shoppers are spending less on luxury fashion and more on affordable alternatives.
- Overexpansion: Ssense invested heavily in logistics and marketing, which became unsustainable as revenues dropped.
These factors, combined with mounting pressure from creditors, have forced Ssense into crisis mode.
Impact on the Fashion Industry
Ssense’s filing is sending shockwaves through the luxury fashion world. The company has been a vital distribution partner for many designer labels, particularly emerging brands that relied on its global online reach. If Ssense downsizes or restructures drastically, it could create ripple effects across the industry.
For Canadian retail, the development underscores the fragile state of even established e-commerce leaders. The outcome of Ssense’s creditor protection case will be closely watched as a test of how luxury retailers can navigate turbulent economic conditions.
What’s Next for Ssense?
As Ssense enters this critical restructuring phase, much will depend on its negotiations with lenders and its ability to secure investor confidence. While bankruptcy protection provides breathing room, it also puts the company under intense scrutiny from suppliers, customers, and employees.
If Ssense manages to restructure successfully, it could re-emerge leaner and more focused. However, if talks fail, creditors may push again for a sale, potentially reshaping the brand’s ownership and direction.
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