Luxury fashion retailer Ssense is now cooperating with lenders to restructure the company, possibly through a sale, after years of mounting losses and a sudden cash crunch.

The Montreal-based company had been at odds with lenders pushing for a quick sale of the business. Ssense resisted their calls, insisting its current owners could get it back on track themselves. Its application for creditor protection filed with the Superior Court of Quebec, however, shows the company is now open to investment or a potential sale “to maximize value for the benefit of their creditors and other stakeholders.”

CEO Rami Atallah told employees Friday that the court accepted Ssense’s application under the Companies’ Creditors Arrangement Act (CCAA). “We now have the requisite interim financing and structure needed to stabilize the business and serve our customers,” Atallah said in an internal email, a copy of which The Logic obtained. The money will let the company resume payments to “various vendors for goods and services,” the email said, and it will continue to operate independently as it restructures.

Court filings show Ssense owed creditors more than $371 million as of July 31, with assets of about $387 million, including $246 million in inventory. The company asked for an initial 10-day stay preventing creditors from seizing assets, with the aim of extending protection until Oct. 20 while it restructures. It also sought court approval for $40 million in interim financing—$15 million from its lenders and $25 million from a numbered company tied to the founders.

The restructuring will include a court-approved sale and investment solicitation process, opening the door to potential investors or buyers. “With the support of our lenders, we now have the foundation to develop and implement a restructuring plan aimed at securing Ssense’s long-term future,” Atallah said in a statement to The Logic. 

Ssense was founded by Atallah and his two brothers in 2003. The company has since grown into a global online marketplace of nearly 800 brands. It employs about 1,160 people, most of them in Montreal, and serves 1.4 million customers annually, according to its court filings. It reported $1.3 billion in revenue in 2024 with losses of more than $132 million.

Ssense’s troubles have been building since the COVID-19 pandemic. After a boom in online shopping in 2021, the company bulked up to meet soaring demand. When consumer spending cooled in 2022 and 2023, it was left with “a significant amount of unsold inventory,” and rising interest rates began to pose a challenge.

The end of the de minimis exemption—a rule that allowed parcels valued up to US$800 to enter the U.S. duty-free, which ended on August 29—delivered another severe blow to the business. Nearly 60 per cent of the company’s customers are based in the U.S., and their average order value is $549.

Ssense said it made several attempts to stem the losses. It limited the brands it carried to focus on top sellers, sold excess merchandise at heavy discounts, froze salaries and made deep cuts to its workforce. “Despite the implementation of the above measures, Ssense’s financial situation has remained challenging,” its application reads. 

The company’s liquidity crisis became dire on Aug. 24, when nearly $135 million in loans came due. It couldn’t pay the debts, and the consortium of banks behind them—including BMO, RBC, JPMorgan Chase, National Bank and Scotiabank—refused to refinance or extend the loans.

Days later, the lenders filed their own CCAA application without Ssense’s consent—typically a company’s debtors and lenders file for CCAA together—seeking a sale of the business with non-binding bids due Oct. 6. The court later granted Ssense a stay order, temporarily blocking creditors from taking action against it.

Ssense’s restructuring will now move forward under the company’s application, not the lenders’. Ernst & Young will oversee the process as the monitor.