Ssense: What Went Wrong

After Donald Trump was re-elected as US president in November, Ssense’s co-founder and chief government, Rami Atallah, advised workers on Slack to not panic concerning the political chief’s threats to boost tariffs, in keeping with an individual with direct information of the matter.

This week, Atallah despatched a unique message. In an e-mail obtained by The Enterprise of Vogue, he advised workers that Ssense can be submitting for Canada’s equal of chapter safety inside 24 hours, and that the e-tailer’s lenders had already filed with the Superior Court docket of Québec, the place Ssense is predicated, to drive a sale of the corporate.

Atallah went on to put the blame for Ssense’s predicament squarely on the Trump administration’s commerce coverage. Canada was among the many first international locations focused with tariffs after Trump took workplace, and the present 25 % levy is among the many world’s highest. That already threatened to push Ssense’s enterprise over the sting: The corporate primarily ships its orders out of its personal warehouse in Montréal, and 60 % of its enterprise comes from prospects within the US, in keeping with a former worker. A last blow is because of land on Friday, when shipments valued at below $800, beforehand exempt from tariffs, are scheduled to face the identical 25 % price on the US border.

The tariffs, together with the lenders’ submitting, “created a right away liquidity disaster no short-term repair may remedy,” Atallah wrote. “After exploring each refinancing and strategic choice, we concluded that restructuring … is the one path for us to proceed working.”

This week’s occasions are a serious blow to an organization that was a trendsetter in on-line luxurious vogue. Within the final decade, Ssense solidified its standing because the go-to on-line retailer for fashion-forward luxurious customers with its coterie of cutting-edge indie designers and engaging reductions. At its peak, the corporate generated north of $800 million in annual gross sales, whereas claiming to be worthwhile, in keeping with a former worker. In 2021, Ssense bought a minority stake to Sequoia Capital at a valuation of greater than $4 billion. Whilst rivals reminiscent of Matches Vogue, Farfetch and Internet-a-Porter have been bought or shut down, Ssense gave the impression to be one of many survivors.

However prior to now yr, Ssense hit a wall: Gross sales to the US, which had greater than tripled between 2019 and 2023, plunged 28 % final yr, in keeping with bank card transaction information from Client Edge. The location’s markdowns, as soon as related to wildly widespread gross sales occasions, turned ubiquitous. It was additionally racking up losses, in keeping with a number of former workers.

Earlier than this week, the corporate was taking different steps to shore up its monetary place. In Might, it laid off greater than 100 workers throughout departments and instituted hiring and promotion freezes, citing tariff uncertainty, in keeping with two former workers.

Ssense’s issues have solely continued to mount, nonetheless. It has struggled to promote by stock and has deferred funds to distributors amid money troubles.

Ssense is much from the one luxurious retailer with these points. Earlier this yr, Saks World advised distributors complaining of late or lacking funds that they might not be made entire till deep into 2026. Earlier this month, Italy’s LuisaViaRoma filed for chapter safety, itemizing over 1,250 collectors.

However some challenges have been distinctive to Ssense, in keeping with former workers. They pointed to Atallah’s unwillingness to department out from the corporate’s historic give attention to younger customers, even because it turned clear this cohort had exhausted the spending energy it had displayed in the course of the “revenge purchasing” part of the pandemic. The corporate held off on hiring extra private consumers, key to drawing big-spending prospects who’re extra keen to pay full value, and deprioritised its model incubation programme which might have saved its assortment recent, some former workers stated.

“A lot of their model vibe and company technique may be very dictatorial. It felt such as you weren’t allowed to say something,” stated AJ Lacouette, who labored in advertising and editorial content material at Ssense from 2022 to 2024. “Suggestions must turn into an enormous a part of Ssense’s core — from prospects to workers. They love surveys however that was only a pacifier. They should learn to open that dialogue.”

Dropping Its Edge

Based as a university thesis venture, Atallah labored along with his brothers, Firas and Bassel, to open a boutique in Montréal in 2004 and launched on-line in 2006, carrying mainstream premium manufacturers like Juicy Couture and seven For All Mankind.

By 2009, Ssense’s assortment blended luxurious labels like Prada with mass manufacturers like Adidas. Within the mid-2010s, the imaginative and prescient of going after youthful, extra streetwear-driven customers, and leaving extra mainstream luxurious prospects to Internet-a-Porter, Matches and Farfetch, took form. Ssense developed a fame for carrying the perfect choice from scorching unbiased manufacturers, reminiscent of Wooyoungmi, Casey Casey and Juun.j. To burnish that fame, it repeatedly turned over its homepage to articles showcasing rising designers and types that wouldn’t have been misplaced in an indie vogue journal.

The purpose of all of it was to distinguish Ssense from a crowded subject of e-commerce websites promoting the identical merchandise from Gucci or Dior. Buyers took be aware. In 2021, Ssense had secured a minority funding from enterprise capital agency Sequoia at a $4.1 billion valuation. That yr its gross sales within the US grew 50 %, in keeping with US debit and bank card information from Client Edge.

However Ssense has more and more relied on reductions for development. Final yr, the corporate added an “all gross sales” button on its product feed the place customers can discover year-round reductions on items from coveted indie manufacturers like Lemaire and Jacquemus, a transfer that fed the corporate’s “discounting drug” amid a drop-off in income, in keeping with an individual with direct information of the matter.

Two former workers described Ssense’s unbiased designer angle as a manner of saving face as luxurious giants like Dior have been leaving the platform, in addition to different discount-happy on-line retailers, in favour of their very own channels. While you discover merchandise from giant manufacturers like Prada and Saint Laurent on Ssense in the present day, it’s typically in classes reminiscent of eyewear.

Administration Misfires

Atallah, who shook up on-line purchasing with controversial strikes like buying digital vogue group and search engine Polyvore in 2018 after it had already ceased operations, has turn into decidedly risk-averse in recent times, in keeping with former workers.

A part of that stems from the construction of the corporate’s board, which consists of Atallah and his brothers and a small stake from Sequoia Capital, in keeping with an individual accustomed to the matter. Atallah is the ultimate determination maker throughout departments from merchandising to editorial and backend operations, the individual stated.

New methods are sometimes mulled over for months throughout a number of conferences, solely to by no means come to move, stated three former workers. For instance, final yr Ssense had conferences about rising its crew of greater than 25 private consumers, however in the end determined towards it, in keeping with an individual with direct information of the matter.

Ssense has additionally pulled again investments in its model incubator programme — the place it covers design, manufacturing and personnel prices — which has produced manufacturers just like the short-lived Random Identities and now Lu’u Dan, Nonetheless Kelly and I’m Sorry by Petra Collins, in keeping with three former workers. Its purpose was to assist preserve Ssense’s assortment recent and preserve its fame as a champion for rising designers, but it surely was additionally an costly funding, one of many folks stated.

The latest lack of momentum had led to inner rumblings about underlying money move troubles properly earlier than this week’s chapter submitting. There had lengthy been a scarcity of transparency across the firm’s monetary well being, three folks stated. Throughout all-hands conferences, firm leaders usually focus on development percentages, not full gross sales and revenue figures. Some firm workers didn’t know that Ssense had taken financing from the Québec authorities till it was revealed in an article on the tech newsite The Logic final February. Exterior of the Atallah household, even senior leaders have been unaware of the extent of Ssense’s money move points, the folks added.

Earlier than the chapter submitting, essentially the most salient proof of Ssense’s money woes got here as designers started to complain to present and former staffers about not receiving funds. That additionally turned a difficulty for Ssense’s partnerships crew since potential model companions have been complaining about not getting paid, one other former worker stated, threatening one other income stream.

Survival Techniques

Ssense stays an essential retailer for unbiased designers that push aesthetic boundaries and attraction to aspirational, Gen-Z luxurious consumers. The corporate nonetheless elicits robust feelings from customers: Feedback below BoF’s Instagram put up concerning the chapter submitting vary from “save Ssense in any respect price!” to “subsequent sale is gonna hit in a different way.”

Atallah advised workers on Thursday that the corporate will proceed regular operations and pay salaries and advantages till additional discover.

“We’re right here in the present day as a result of the foundations of the sport have modified,” Atallah stated within the memo. “What occurs subsequent is determined by the ruling of the CCAA proceedings, however our willpower is unwavering. Now, greater than ever, we want focus and dedication.”

However how Ssense strikes ahead from this vital second is unclear. Earlier than its chapter submitting, the corporate advised workers it was putting in an government within the US to create a go-to-market technique which will embrace opening a warehouse or retailer there, in keeping with two former workers. However that probably hangs within the steadiness as Ssense fights off a sale.

Even when the corporate can efficiently fend off collectors and mitigate the impression of tariffs, it nonetheless must replace its system of utilizing fixed markdowns to attraction to Gen-Z customers. What that appears like is unclear. Mytheresa, by far essentially the most profitable luxurious e-tailer in the present day, focusses on serving a high-earning clientele with a tightly curated edit, private purchasing and lavish occasions. However Ssense would battle to emulate this and preserve its distinction as a innovative retailer, stated Mario Ortelli, managing associate at luxurious advisory agency Ortelli & Co.

“It’s not a simple one to attempt to discover the brand new developments which are coming to the market, and having the ability to have the suitable assortment creation to construct that relationship along with your buyer,” Ortelli stated. “They rode a wave that’s not there anymore. You need to discover a new proposition.”