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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.