Montreal-based online fashion retailer Ssense has been navigating significant financial challenges following the imposition of U.S. tariffs under the Trump administration, which intensified pressures on the company amid shifting consumer behaviors and a competitive luxury retail environment.

Ssense, known for its eclectic mix of high-end and emerging designer brands, including items like a $7,000 Chloé dress and more affordable sneakers, experienced a sharp decline in U.S. sales after the elimination of a long-standing tariff exemption for imports valued at $800 or less. This change, implemented last year, subjected American customers to duties on purchases they had previously received duty-free, contributing to Ssense’s loss of nearly a fifth of its U.S. customer base, which once comprised 60 percent of its clientele.

The tariff adjustments were a significant factor among others that led Ssense into a court-supervised restructuring process around a year ago. The company had seen growth during the COVID-19 pandemic as online shopping surged but was subsequently burdened by excess inventory as demand waned. Prior to restructuring, the company was valued at 5 billion Canadian dollars and backed by investors such as Silicon Valley venture capital firm Sequoia Capital, but experienced liquidity issues that culminated in creditor protection filings.

Ssense’s leadership, including CEO Rami Atallah and his brothers who founded the company over two decades ago, have since secured new ownership along with the Canadian investment firm First Avenue Advisory. The new Ssense paid 59 million Canadian dollars in cash during the restructuring, assuming additional liabilities. The company has reduced its workforce from 1,200 to approximately 700 employees and continues to operate its Montreal headquarters and fulfillment center, which ships products globally.

To mitigate future tariff impacts, Ssense plans to open a U.S.-based fulfillment center in the Northeast in the first quarter of 2025. This move is designed to reduce duties on goods imported into the U.S., potentially lowering tariffs paid on wholesale shipments before distribution to American customers. The retailer has indicated it aims to absorb these tariff costs rather than pass them onto consumers directly. This strategy aligns with the U.S. government’s stated intent that companies avoiding tariffs by establishing U.S. operations could gain competitive advantages.

While the company remains cautious about the impact of President Biden’s new 50 percent tariffs on specific Canadian goods, spokespeople have suggested that these are unlikely to materially affect Ssense given that most of their merchandise is sourced internationally, not from Canada.

Ssense is also adopting artificial intelligence to streamline operations and plans to launch its own clothing line by the end of next year. The company is working to restore relationships with designers and suppliers, many of whom faced unpaid debts following the restructuring. London-based label Simone Rocha confirmed an outstanding debt but expressed confidence in Ssense’s future.

Despite these efforts, the competitive landscape remains challenging. Ssense competes with established multi-brand luxury e-commerce platforms such as Net-a-Porter and Mytheresa, the latter reporting sales growth during periods where Ssense’s U.S. revenue has declined. Industry analysts highlight growing competition in the multi-line luxury retail sector as a persistent obstacle.

Ssense anticipates returning to profitability within the next 12 months and remains focused on growth prospects. CEO Atallah expressed optimism about the company’s potential, emphasizing ongoing commitment to rebuilding and adapting to the evolving market.