Podcast Summary: The Business of Fashion Podcast - "What Went Wrong at Ssense"

Episode Date: September 3, 2025
Host(s): Brian Baskin, Sheena Butler Young
Guest: Malik Morris, Senior Correspondent

Episode Overview

This episode of The Business of Fashion Podcast’s "The Debrief" examines the recent bankruptcy protection filing of Ssense, a pioneering Canadian online luxury retailer beloved by Gen Z and young fashion consumers. The hosts, joined by correspondent Malik Morris, dissect the causes behind Ssense’s crisis, its unique cultural significance, the impact on the broader luxury retail market, and what might come next as control hangs in the legal balance.

Key Discussion Points & Insights

1. Why Ssense’s Decline Struck a Chord

• Gen Z Touchstone: Ssense became “the go-to for indie designers, Gen Z tastemaking and blowout sales” (Sheena Butler Young, 01:12), offering unique selections from new and established labels, edgy editorial, and irreverent social media.
• Cultural Importance: The community’s reaction to the bankruptcy was unusually personal and urgent, reflecting the platform’s role as a tastemaker and supporter of emerging talent.

"I've never in recent memory seen so many readers react to a bankruptcy for BoF the way they did to Essence." (Sheena Butler Young, 02:08)

2. The Downward Spiral: How Ssense Lost Its Edge

• Over-Reliance on Discounts:
  • Initially lauded for its curated, “cool” selection and editorial, Ssense increasingly trained customers to only shop sales, eroding margins and tarnishing its full-price luxury positioning.
  • The “All Sales” site button made deep discounts perpetual, drawing shoppers but undermining brand credibility. (Malik Morris, 12:13)

"It really did start out as like this refreshing proposition...But over time it just became like an off price retailer essentially." (Malik Morris, 02:26)

• Loss for Indie Designers: By becoming known as the "sale place," Ssense risked alienating independent brands who relied on full-price sales for survival.

• Tariffs & Trade Tensions:

  • The Trump-era tariffs on Canadian imports into the US imposed sudden cost burdens, but Malik argues “the cracks were showing long before the latest trade shock” (Brian Baskin, 01:29).
  • Given 60% of Ssense’s sales are US-based, fulfillment and tariff issues became existential threats.

• Industry-Wide Headwinds:

  • The luxury sector slowdown, inflation, and end of the de minimis tax loophole battered revenue, especially among younger shoppers, who “aren’t in the fullest of their spending power.” (Malik Morris, 02:26)

3. The Legal and Ownership Drama

• Bankruptcy Mechanics:
  • The company’s CCAA application (Canada’s equivalent of bankruptcy protection) is underway, with dueling filings: creditors want a sale, the Atallah family founders want to retain control and restructure.
  • Ownership is unusually personal: the Atallah brothers maintain control, making proceedings potentially more contentious than elsewhere.

"This is the thing that we created from the ground up...you're not going to pry out of our hands." (Malik Morris, 10:54)

• What Happens Next?
  • The outcome depends on court rulings: Will the brands’ fate be a fire sale or family-led comeback?
  • Both scenarios have big implications for designers whose main pipeline is Ssense.

4. Could Ssense Have Done Anything Differently?

• Alternative Revenue Streams:
  • Ssense operated brand incubators, helping launch in-house microbrands that could have further offset losses. Expansion here was a missed opportunity.
• Slowness to Change:
  • Leadership inertia meant potential pivots, like scaling VIP personal shoppers to drive full-price sales, were discussed but never enacted.

“There was talks...about ramping that up to boost full price selling, but that never came to pass...there's this sort of inertia there that's detrimental when the current formula stops working.” (Malik Morris, 11:20)

• Broader Retail Issues:
  • Heavy inventory commitments via the wholesale model and delayed vendor payments echo industry-wide problems experienced by peers like Farfetch and Matches Fashion.
• Marketplace Model as the Future: Newer, successful e-commerce sites increasingly use marketplace/dropship models to keep margins up—Ssense clung to a riskier, inventory-heavy wholesale approach.

5. The Bigger Picture: Effects on Indie Designers and the Ecosystem

• Many of Ssense's brand partners are niche or indie, without strong direct-to-consumer channels or other retail partners, risking their survival.
• A messy collapse could repeat or worsen the fallout seen after Matches Fashion’s demise, where locked-up inventory and unpaid designers led to label closures.

"Half their inventory is tiny brands that probably only sell or primarily sell in essence." (Brian Baskin, 27:01)

6. Is There a Positive Path Forward?

• Potential for Sale: Consolidation in luxury e-commerce, with players like Mytheresa, Coupang, and even Amazon mooted as buyers, might offer a lifeline.
• Need for Savvy Leadership: The best chance for Ssense—and its ecosystem—lies in “new leadership...who can push the boundaries when it comes to assortment and editorial.” (Malik Morris, 24:26)

"No new leader is going to be like, well let's just shutter this company willy nilly. Like there's a whole ecosystem that needs to be maintained." (Malik Morris, 25:41)

Notable Quotes & Moments

• On Ssense’s fall from grace:
  • “It really did start out as like this refreshing proposition of online luxury shopping...but over time it just became like an off price retailer.” (Malik Morris, 02:26)
• On the shift in consumer habits:
  • "They just became associated with being like the sale place, the discounting place, which...curbs sort of great credibility with designers.” (Malik Morris, 02:26)
• On Gen Z customer targeting:
  • "Consumers still love this company. There's so many people in those comments saying, 'save essence.'" (Malik Morris, 19:33)
• On Ssense’s missed opportunities:
  • "A part of that is just leaning on the sales...this inertia of like continuing this playbook that obviously is eating at its margins." (Malik Morris, 13:00)
• On the difficulty of restructuring:
  • "The first thing that a new company is going to want to do is to get them (the founders) out the door and get someone new in there if they ran it to this point." (Malik Morris, 28:37)
• On broader industry context:
  • "This is an industry wide issue...Even LVMH sales are not doing great, the fashion division is not doing great." (Malik Morris, 16:09)
• On the importance for indie brands:
  • "You have like really, really, really small brands that are selling on Essence with really, really specific aesthetics that would be difficult for them to just go to a Mytheresa or...Farfetch." (Malik Morris, 27:01)

Timestamps for Important Segments

• [01:12] - Why Ssense’s bankruptcy matters to the industry and BoF’s readership
• [02:26] - How Ssense built, then lost, its cultural cachet and became dependent on discounts
• [04:43] - The role of tariffs and layoffs in accelerating the company’s downfall
• [07:42] - The mechanics and stakes of the bankruptcy filing; unique family-led ownership structure
• [11:20] - Internal slowness and missed opportunities—failures to pivot (e.g., lack of VIP customer focus)
• [14:29] - Brand incubators, the missed opportunity for internal diversification
• [17:37] - Why unique curation and a cool factor weren’t enough to stave off structural issues
• [19:33] - How Ssense could refine its niche and keep Gen Z without always-on sales
• [24:26] - Outlook: What business as usual means now; possible buyer/leadership scenarios
• [27:01] - Impact on the micro-brand ecosystem: risk to indie labels
• [28:37] - The challenge of finding credible new ownership and leadership under strained conditions

Conclusion

The bankruptcy of Ssense marks another seismic shift in the online luxury retail landscape, exposing deep structural challenges faced by niche, culture-driving platforms. The episode blends financial analysis with observations about Ssense’s cultural resilience and market position, raising questions about where value—and survival—now lie in luxury e-commerce. Listeners come away with a nuanced view of how strategic missteps, industry turbulence, and stakeholder relationships can make or break even the coolest brands.

For more in-depth coverage:
Check Malik Morris’s full article "What Went Wrong at Ssense" at businessoffashion.com (subscriber access required).