SSENSE to Seek Bankruptcy Protection Amid U.S. Tariff Pressures
Canadian luxury fashion retailer SSENSE says it will file for creditor protection after new U.S. trade policies triggered what its chief executive described as a sudden liquidity crisis.
In an email to employees, CEO Rami Atallah said the company was caught off guard by the recent suspension of the de minimis exemption, which had allowed duty-free shipping of packages worth $800 or less into the United States. The exemption, used heavily by global e-commerce firms, was eliminated last month under an executive order from former U.S. President Donald Trump.
“At a time when liquidity has already tightened and trade pressures have increased, the removal of this exemption has created an immediate crisis no short-term fix could solve,” Atallah wrote. He confirmed that SSENSE would file for protection under the Companies’ Creditors Arrangement Act (CCAA) to safeguard its operations, retain control of its assets, and restructure.
The Montreal-based retailer, founded in 2003 by Atallah and his brothers, employs around 1,200 staff worldwide and became a prominent player in online luxury fashion. Venture capital giant Sequoia Capital valued the company at $4 billion in 2021, underscoring its global influence.
Despite the filing, SSENSE says it will continue to operate, pay salaries, and maintain employee benefits. “We believe in the fundamental strength of our business,” a company spokesperson said, noting that while lenders had initiated a sale process without management’s consent, SSENSE would move ahead with its own restructuring application.
Industry experts say the company’s challenges reflect broader headwinds in luxury retail. Huma Aslam, a Toronto-based fashion technology consultant, called the filing “significant,” noting that even established global platforms are not immune to tariff shocks. Charles de Brabant, executive director of the Bensadoun School of Retail Management at McGill University, added that declining luxury sales due to inflation and the “double whammy” of tariffs have made conditions especially tough.
The fallout from the U.S. policy shift is being felt across the industry. Tapestry, the parent company of Coach, has warned of a $160 million hit to profits, while Canadian clothing label Province of Canada has temporarily halted U.S. shipments.
Last year, U.S. customs data showed nearly 1.4 billion packages, worth more than $64 billion, entered the country without duties under the de minimis rule. Its elimination now means importers face standard tariff rates or flat fees of $80 to $200 per parcel.
As the policy takes hold, analysts warn more retailers could follow SSENSE in restructuring efforts, given the heavy reliance on U.S. consumers by both North American and global fashion brands.
