Ssense, the Montreal-based online luxury fashion retailer, filed for bankruptcy protection on August 30, 2025, marking a dramatic fall for what was once considered a trendsetting force in the fashion world. This move shocked the industry and sent ripples through the luxury retail landscape.
The Canadian fashion platform, renowned for selling high-end designer brands to young shoppers worldwide, struggled to survive the perfect storm of financial pressures that hit in 2025.
What Led to Ssense’s Downfall?
The collapse wasn’t sudden. Ssense faced a devastating 28% drop in sales during the first half of 2025, according to credit card data from Consumer Edge. This massive decline followed years of strong growth that had made the company a favorite among fashion-forward millennials and Gen Z shoppers.
Sales to the US, which had more than tripled between 2019 and 2023, plunged 28 percent last year, creating a cash flow crisis that the company couldn’t overcome.
The De Minimis Death Blow
One of the biggest factors in Ssense’s collapse was the end of a crucial tax loophole. The closing of the de minimis loophole on Friday meant packages under $800 in value entering the US became subject to duties.
For years, Ssense relied on the U.S. de minimis rule, which allowed duty-free imports under $800. This rule, which started in 1938, had been a lifeline for cross-border online retailers like Ssense. When it ended on August 29, 2025, American customers suddenly faced much higher prices.
The Trump administration’s trade policies have slapped 25% tariffs on Canadian imports, exacerbating liquidity stress, making the situation even worse for the Montreal-based retailer.
Lender Pressure Forces Bankruptcy Filing
Ssense filed for bankruptcy protection after what it described as an attempt by lenders to force a sale of the company. The company’s primary lender pushed for a sale under Canada’s Companies’ Creditors Arrangement Act (CCAA), essentially forcing Ssense’s hand.
CEO Rami Atallah told employees in a letter that the company had been working in good faith with lenders, but the pressure became too much to handle.
The Human Cost
In May, the company laid off more than 100 employees across departments. Earlier reports also showed Ssense laid off eight per cent of its workforce as the company grappled with the impacts of tariffs, marking at least the third round of cuts in the past year.
What This Means for Luxury E-Commerce
Ssense’s bankruptcy sends a clear warning to the luxury e-commerce world. The company had been seen as a success story, growing from a small Montreal startup to a global fashion destination worth hundreds of millions of dollars.
The collapse shows how quickly trade policies can destroy even successful businesses. For American shoppers, losing access to affordable luxury items through platforms like Ssense means fewer options and higher prices.
The Road Ahead
Atallah said that Ssense will continue to operate as usual and keep paying salaries and benefits during the bankruptcy protection period. However, the company’s future remains uncertain as it navigates the restructuring process.
The Ssense story serves as a reminder of how global trade policies can have real consequences for businesses and consumers alike. What started as a promising luxury fashion platform has become a cautionary tale about the risks of cross-border e-commerce in an era of changing trade rules.
