Ssense can remain independent as it seeks to turn its ailing business around.
The Superior Court of Québec on Friday ruled that the Montreal-based e-tailer is free to restructure its business and pay off its debt on its own. The ruling comes two weeks after Ssense filed for Canada’s equivalent of bankruptcy protection on Aug. 29 after the e-tailer’s creditors had already filed an application to force a sale of the company. A temporary stay of proceedings immediately went into effect.
“Today’s court decision is a critical step, marking the beginning of our next phase. With the support of our lenders, we now have the foundation to develop and implement a restructuring plan aimed at securing Ssense’s long-term future,” the company’s chief executive, Rami Atallah, said in a statement following the ruling. “We now have the time, resources, and structure in place to begin the process of rebuilding a stronger Ssense.”
But it now falls squarely on Ssense to right size its business. The company reportedly has $40 million in interim financing, but it also has $371 million in debt, with $229 million owed to banks and trade partners. The ruling allows Ssense to pursue outside funding to patch up its debt, including a sale. But Atallah told employees the day before the company‘s filing that Ssense would not be seeking a new owner anytime soon.
Ssense cited the 30 percent tariffs the Trump administration imposed on Canadian imports this year, and the end of the de minimis tax loophole — which allowed packages under the value of $800 to enter the US duty free — as the primary reason for its initial bankruptcy filing. Nearly 60 percent of Ssense’s sales come from the US. But the company had been on a downward spiral for over a year. Its sales dropped more than 20 percent in 2024 as its formula of targeting Gen-Z fashion lovers with incessant discounting grew stale and weighed on margins. The brand owes many of its designers money amid its cash flow issues.
Company insiders told BoF that Atallah has been hesitant to change up the strategy. Last year, Ssense skipped hiring more personal shoppers that could have helped increase its full price business, and it’s been steadily pulling back on the company’s brand incubation program where it finds and funds new design talent. In addition to cleaning up the balance sheet, Ssense will likely have to freshen its assortment in a way that can get Gen-Z luxury consumers to shop at full price.