Montreal-based online fashion retailer Ssense plans to file for bankruptcy protection as its primary lender attempts to force a sale of the company, a Ssense spokesperson told CBC News in an email.
According to the company, its primary lender has placed Ssense under Companies’ Creditors Arrangement Act (CCAA) protection in order to launch a sale. (Requesting CCAA protection prevents creditors from forcing an insolvent company into bankruptcy and paves the way for financial restructuring.)
Ssense says that its lender made the move without the company’s consent.
Lenders include Bank of Montreal, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia (Scotiabank) and JPMorgan Chase & Co. CBC News reached out to all of the lenders for comment and is waiting to hear back from all but BMO. BMO declined to comment.
Now, Ssense plans to file its own CCAA application imminently to “safeguard the company, retain control of our assets and operations, and fight for the future of this business,” the statement 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.”
The news follows a seemingly tumultuous year for Canadian retailers, with Hudson’s Bay and Frank & Oak shuttering their doors nationwide earlier this year.
Ssense partly attributed its own struggles to U.S. President Donald Trump’s trade directives, including the elimination of the U.S. de minimis exemption. The exemption previously allowed packages worth $800 or less to travel to the U.S. from Canada duty-free — a big help for Canadian retailers with a sizeable American consumer base.
Landlords of properties formerly leased by the Hudson’s Bay Company are opposing billionaire Ruby Liu’s bids, arguing she lacks the ‘time, money, experience, or plans to succeed,’ according to a court document.
Lisa Hutcheson, a retail strategist with Canadian retail consulting firm J.C. Williams Group, said many factors can make retailers vulnerable right now.
For instance, e-commerce companies, like Ssense, that specialize in luxury brands don’t just compete with other Canadian brands; they compete with digital players from around the world. The demand for luxury brands is also softening amid inflation and economic uncertainty, Hutcheson said. Many Gen Z and Gen Alpha shoppers prefer to buy things in person, too, she added.
That means that, typically, there isn’t a single cause driving a retailer’s financial woes. “It’s usually a perfect storm of operational challenges, economic pressures, and what’s happening in the market,” Hutcheson said.
According to Hutcheson, there is hope for Ssense, but the company has to take a look at how they can reposition themselves in such a volatile market.
Business of Fashion first broke the Ssense news on Thursday.