SSENSE is safe (for now) The founding family has managed to retain ownership of the retailer

In fashion, more than sudden collapses, there are slow-motion implosions. And often a bankruptcy does not mean the end. This is somewhat what is happening with the collapse of SSENSE: hit by American tariffs in an already weak luxury market, the company first tried to cut employees, then found itself in a tug-of-war against creditors who wanted to force its sale, and finally had to seek protection under Canadian law to avoid disintegration and attempt a restructuring. And after a complex back-and-forth of valuations and offers, refinancing and restructurings with a debt hovering around 371 million Canadian dollars, the founding family has won the bid to retain ownership of the company at the end of the bankruptcy protection process.

The bid put forward by the Atallah founding brothers, in collaboration with a major Canadian multi-family office, is expected to close within a month from today, following approval from the court and regulatory authorities. Once approval is obtained, the bankruptcy protection process will continue as normal, allowing the Atallahs to retain full control instead of passing to new owners, laying the groundwork for strategic continuity in the future and relative stability for customers, suppliers and employees when the company is finally out of danger.

What happened to SSENSE?

The latest news on this complicated saga dates back to last August, when the retailer filed for creditor protection under the Companies' Creditors Arrangement Act, a law known by the acronym CCAA. The initial request came in response to pressure from creditors, who had initiated actions to force the sale of the company and recover the accumulated debts.

Around mid-September last year, SSENSE had obtained an interim financing of 40 million Canadian dollars (approximately 28.8 million US dollars), although documents filed with Ernst & Young reveal much higher debts. The most scandalous part of the entire affair, however, came at this point when Ernst & Young published the list of brands to which the retailer still owed money: a list full of names of independent brands that were precisely the brands everyone believed SSENSE was promoting.

Throughout the affair, the current CEO Rami Atallah had not ruled out a sale if things got worse (in that case the hypothetical scenario would be similar to that of Farfetch) but he and his brothers intended to put forward their own bid. At the beginning of December, the deadline for submitting qualified offers from potential buyers was further postponed. In general, the company stated that «requests for extension of the stay of proceedings will continue to be presented to the court, as necessary, until the successful exit from the CCAA process».

How will SSENSE's story end?

Now that the Atallah family has found a solution to its problems, the situation has found a happy ending that is not entirely happy nor entirely final. Yet the alternative would have been completely disastrous. Today’s announcement is therefore good news for SSENSE and for the entire fashion system of the Atlantic bloc. At the time of filing for bankruptcy protection, which is basically one step before full bankruptcy, designers and industry insiders feared that the disappearance of SSENSE would further impoverish the already scarce infrastructure for visibility and growth for emerging talents, in a scenario that is already far from reassuring.

Currently, for industry insiders, the real damage to SSENSE is reputational as well as economic. Numerous owners of small brands that were also successful online, but also of more solid brands like Auralee or Lemaire, found themselves on the front line of this affair as well as, in some cases, literally broke. It is undeniable that the recent financial disasters of major luxury e-commerce platforms will change not so much the way large commercial brands operate (for years they have been narrowing their retailer network in favor of direct sales) but the smaller and independent brands that, paradoxically, were precisely those for which SSENSE was most essential.

Takeaways

- The crisis at SSENSE increasingly appears to be a slow implosion, worsened by an already fragile luxury market, U.S. tariffs, and a debt of approximately 371 million Canadian dollars.

- To avoid a forced sale and bankruptcy, the company sought protection under Canada’s CCAA law, obtaining multiple extensions to restructure and seek new financing or investors.

- After a long process of bids and valuations, the founding Atallah family won the auction to retain control of the company, ensuring strategic continuity and stability for customers, suppliers, and employees.

- This outcome is good news for SSENSE and for the ecosystem of independent brands, which risked losing an essential platform for visibility and growth, even though the reputational and economic damage remains significant.