Canadian fashion hub Ssense said Thursday it plans to file for bankruptcy protection — a major plot twist in what seemed like a high-flying local fashion tech success story. The news may have come as a surprise to shoppers of the Montreal-based e-commerce retailer’s luxury streetwear, but many industry insiders and suppliers have seen this crisis coming.
Ssense CEO Rami Atallah wrote in a company memo that the filing was made “to protect the company, maintain control of our assets and operations, and defend our future” amid pressure from lenders to force a sale. Atallah cited the tipping point of the company’s woes as U.S. tariffs and the end of the “de minimus” exemption that meant orders worth $800 or less could be shipped without extra fees.
Ssense was co-founded in 2003 by Atallah and his two brothers, who immigrated to Montreal from Syria as teens. Calling themselves “expert outsiders,” they brought a mix of professional backgrounds uniquely suited to building an e-comm site from scratch: finance (Firas Atallah), mechanical engineering (Bassel Atallah) and computer engineering (Rami Atallah).
In the following decades, Ssense became the go-to destination for edgy fashion targeted at 17- to 40-year-olds, a heady mix of avant-garde design and streetwear positioned on the site and social media alongside knowing, editorial-style marketing.
They opened a bricks-and-mortar store in Montreal in 2004, then a flagship in 2018 that was a fashion-person playground. Ssense buyers dove deep to procure the freshest streetwear collabs as well as avant-garde wares from legends like Dries van Noten, Comme des Garçons and Simone Rocha. One-of-a-kind homewares were sold alongside quirky couture for kids and dogs. Business soared during the pandemic, when fashion lovers were stuck at home ordering Margiela Tabi split-toed shoes to staunch the void.
Industry insiders, however, read the tea leaves.
“Ssense was where the cool kids shopped. Then they kind of lost the plot,” said Nicholas Mellamphy, a longtime luxury retailer who recently witnessed the demise of The Bay as executive director of its high-fashion department The Room. “They fell into the trap that every retailer does, which is the competition to get brands away from their competitors.” The problem with that, he says, “is that you lose your sense of identity and then what are you? There is no point of view. Personality has become stripped from retail.”
Rumours have been spreading about Ssense’s struggles in recent years: Layoffs shook up employees. The company was carrying a lot of inventory. The highly anticipated, deeply discounted sales became more frequent. Payments slowed to a crawl.
Paying your vendors is the real litmus test. Designer Rashelle Campbell (rashelle.ca) celebrated a huge milestone for her small business when her line was picked up by Ssense buyers in 2021. “Being associated with those luxury brands is a really big deal,” said the Edmonton-based Indigenous designer known for her hand-tufted, hand-tied colourful rugs, which retail from $700 to $2,100.
The morning after the bankruptcy filing announcement, she posted on Instagram saying her payments were 14 weeks behind, despite some 15 calls and letters attempting to settle the accounts. “It has been stressful. This was a significant portion of my business,” she said. “I’m going to have to come up with a whole new plan to move forward.”
Campbell was one of just a few Canadian brands on the site, including Spencer Badu and Beaufille, both from Toronto, and Maki Rugs from Kelowna. But even so, the potential closing of such a large retailer would have repercussions in a local industry already dealing with the loss of Hudson’s Bay and Nordstrom. And, of course, the tariffs.
“What is happening to Ssense isn’t just about one company,” said Gail McInnis, Toronto-based fashion retail and consumer PR expert. “It points to broader challenges in how Canadian retail and fashion businesses can stay competitive in such a challenging environment.”
Tariffs are a huge deal for companies like Ssense that rely on international customers — the more niche, exclusive and expensive your product, the more people you need to be able to reach to find your audience. “Canadian brands have depended on the online world and U.S. customers for much of their income,” said McInnis.
One American Ssense shopper shared receipts to demonstrate exactly what the costs of the tariffs are. On Threads, New York menswear writer @KevinPeterWilson posted his bill for an $895 USD purchase. Even with free shipping, the duties and taxes took his total to $1,254.72. “Ssense is 100% done,” he wrote. “I will definitely not be ordering from them.”
Canadians are low adopters of online shopping, says retail strategist Lisa Hutcheson. We make less than 10 per cent of purchases online (including general merchandise and grocery click and collect); in Europe and the U.S. it’s in the 25 per cent range.
However they’re shopping, Hutcheson says consumers like a “seamless” transition between online and real life. They become inspired by and familiar with a brand online but want it to translate into a tangible IRL experience. Ssense never expanded beyond its Montreal flagship, which wasn’t accessible to their key markets. “Retailers that are doing well are listening to what is happening in the industry,” she said. “They are the ones that do test what the customer base is telling them.”
Craig Patterson, founder and CEO of Retail Insider, has been hearing about Ssense’s troubles for months. “Tariffs are a headwind for sure but they were clearly in trouble before that,” he said. Young people may buy designer hoodies online, but what most high-end consumers want is to be pampered. “Luxury shoppers do like to go to the stores, to have a good experience,” he said, pointing to the flagships flooding into Canada like the recent Yorkdale openings of Rimowa, Tiffany & Co. and Dior Beauty (all owned by behemoth LVMH). “There is a lot of competition for that luxury dollar.”
To grow a retail brand, you need to go big. And at the rate we are going, Canadian retail is going nowhere at all.
