SSENSE Seeks Bankruptcy Protection Amid US Tariff Challenges
Published 29 August 2025
Highlights
- Canadian luxury retailer SSENSE plans to file for bankruptcy protection due to US tariffs and liquidity issues.
- The de minimis exemption, allowing duty-free shipping for packages under $800, was recently suspended by an executive order from Donald Trump.
- SSENSE aims to continue operations and pay employees while restructuring under the Companies' Creditors Arrangement Act (CCAA).
- The end of the de minimis exemption could lead to $13bn in extra costs for businesses and consumers, affecting global e-commerce.
- Experts suggest the tariff changes will increase prices and complicate logistics for direct-to-consumer brands like Shein and Temu.
-
Rewritten Article
Headline: SSENSE Seeks Bankruptcy Protection Amid US Tariff Challenges
Canadian luxury fashion retailer SSENSE has announced plans to file for bankruptcy protection, citing significant financial strain from recent US tariff changes. The Montreal-based company, known for its global e-commerce presence, is grappling with the suspension of the de minimis exemption, which previously allowed duty-free shipping for packages valued under $800.
Impact of US Tariff Policy
The de minimis exemption, part of the Tariff Act of 1930, was a crucial element for many e-commerce businesses, facilitating cost-effective shipping to the US. However, an executive order from former President Donald Trump ended this exemption, affecting millions of shipments and potentially adding $13 billion in costs for businesses and consumers. This policy shift has particularly impacted companies with direct-to-consumer models, such as SSENSE, which rely on small parcel shipments.
SSENSE's Response and Future Plans
In an email to staff, SSENSE CEO Rami Atallah expressed surprise at the sudden policy change and highlighted the resulting liquidity crisis. Despite these challenges, the company plans to continue operations, maintain employee salaries, and restructure under Canada's Companies' Creditors Arrangement Act (CCAA). This legal framework allows financially troubled firms to reorganize while protecting their assets.
Broader Implications for Retailers
The end of the de minimis exemption is not only affecting SSENSE but also other global retailers, including Chinese brands like Shein and Temu. These companies now face the complex task of adjusting prices and logistics to accommodate the new tariff landscape. Erin McLaughlin, a senior economist, noted that while these brands will remain competitive, consumers may see price increases and reduced product variety.
Expert Insights
Industry experts, such as Charles de Brabant from McGill University, suggest that the luxury retail sector is under pressure from both inflation and tariff changes. The situation underscores the vulnerability of even well-established firms to shifts in international trade policies.
-
Scenario Analysis
The decision by SSENSE to seek bankruptcy protection highlights the broader challenges facing the global retail market amid changing US trade policies. As the company navigates restructuring, it may set a precedent for other retailers affected by similar issues. The suspension of the de minimis exemption could lead to increased prices and logistical complexities, prompting businesses to reassess their strategies. Experts predict that the retail landscape will continue to evolve, with potential for further policy changes impacting international trade. As companies adapt, consumers may experience shifts in pricing and product availability, reshaping the e-commerce experience.
Canadian luxury fashion retailer SSENSE has announced plans to file for bankruptcy protection, citing significant financial strain from recent US tariff changes. The Montreal-based company, known for its global e-commerce presence, is grappling with the suspension of the de minimis exemption, which previously allowed duty-free shipping for packages valued under $800.
Impact of US Tariff Policy
The de minimis exemption, part of the Tariff Act of 1930, was a crucial element for many e-commerce businesses, facilitating cost-effective shipping to the US. However, an executive order from former President Donald Trump ended this exemption, affecting millions of shipments and potentially adding $13 billion in costs for businesses and consumers. This policy shift has particularly impacted companies with direct-to-consumer models, such as SSENSE, which rely on small parcel shipments.
SSENSE's Response and Future Plans
In an email to staff, SSENSE CEO Rami Atallah expressed surprise at the sudden policy change and highlighted the resulting liquidity crisis. Despite these challenges, the company plans to continue operations, maintain employee salaries, and restructure under Canada's Companies' Creditors Arrangement Act (CCAA). This legal framework allows financially troubled firms to reorganize while protecting their assets.
Broader Implications for Retailers
The end of the de minimis exemption is not only affecting SSENSE but also other global retailers, including Chinese brands like Shein and Temu. These companies now face the complex task of adjusting prices and logistics to accommodate the new tariff landscape. Erin McLaughlin, a senior economist, noted that while these brands will remain competitive, consumers may see price increases and reduced product variety.
Expert Insights
Industry experts, such as Charles de Brabant from McGill University, suggest that the luxury retail sector is under pressure from both inflation and tariff changes. The situation underscores the vulnerability of even well-established firms to shifts in international trade policies.
What this might mean
The decision by SSENSE to seek bankruptcy protection highlights the broader challenges facing the global retail market amid changing US trade policies. As the company navigates restructuring, it may set a precedent for other retailers affected by similar issues. The suspension of the de minimis exemption could lead to increased prices and logistical complexities, prompting businesses to reassess their strategies. Experts predict that the retail landscape will continue to evolve, with potential for further policy changes impacting international trade. As companies adapt, consumers may experience shifts in pricing and product availability, reshaping the e-commerce experience.
