A store display at Ssense Montreal. In an internal message Thursday, the retailer's CEO told employees the company plans to file for creditor protection.Supplied
Online high-end fashion retailer Ssense plans to file for protection from creditors imminently after its lenders pushed for the sale of the company.
Founder and chief executive officer Rami Atallah said in an internal message to more than 1,000 employees on Thursday that the Montreal company, legally known as Atallah Group Inc., plans to file for protection under the Companies’ Creditors Arrangement Act this week. He said this would “protect the company, keep control of our assets and operations, and fight for the future of the company.”
The plan is an attempt to counter a rival filing by its unidentified primary lender, which Mr. Atallah told employees has moved to place the company under CCAA protection without its consent to sell Ssense. “We do not believe this is the right path for Ssense,” he wrote in the internal note.
Ssense spokesperson Janet Park confirmed in an email the company would proceed with its own rival CCAA application, saying that in recent months, “we have worked tirelessly and in good faith with our financing partners to secure an agreement that would recapitalize and restructure the business in light of significant economic headwinds facing the retail sector.”
“While we sought a collaborative path forward, our primary lender has chosen instead to place the company under CCAA protection and commence a sale process without our consent. We are deeply disappointed in this decision,” Ms. Park said.
Ssense, like some of its competitors, has encountered liquidity issues and has laid off staff during a period of global trade uncertainty spurred by U.S. President Donald Trump’s tariff war. One change that has “dramatically” changed market conditions, Mr. Atallah wrote, was Washington’s move to end a duty-free exemption for packages arriving in the U.S. that are worth less than US$800, which comes into effect Friday.
Ms. Park said the company “explored every option with advisers to refinance and restructure, but CCAA was the only viable solution in order to survive.”
Mr. Atallah told employees the court will assess both CCAA applications and “decide which path we follow, likely within the next week.”
Ms. Park said the company’s restructuring plan includes restoring trust with vendors, taking “a disciplined, surgical approach” to increasing customer demand, reorganizing its operations and optimizing its global supply chain.
Mr. Atallah founded Ssense with his two brothers in 2003 – the siblings immigrated from Syria to Montreal with their family when they were teens. It became one of Canada’s largest private technology-enabled companies during the past decade, with revenues exceeding US$750-million at its peak.
The retailer, which sells globally online and at a physical store in Old Montreal, was valued at $5-billion when Sequoia Capital bought a minority stake in 2021.
News of the impending filing was first reported by The Business of Fashion.