As Canadian companies brace for the impact of President Trump’s latest tariffs, a Montreal-based business has been trying to recover from the levies he introduced last year.
Those tariffs helped push Ssense, a trendy online clothes retailer, into a financial meltdown that sent shock waves through much of the fashion world.
Ssense’s website sells everything from a $7,000 Chloé dress to a $100 pair of Converse sneakers. It also lists products from lesser-known designers, some of whom say the platform has been a crucial source of sales.
This year, Ssense emerged from the Canadian equivalent of a Chapter 11 reorganization and hopes to rebuild itself so that it can withstand trade wars between the United States and Canada. In particular, the company aims to lessen the burden of American tariffs by moving a core part of its operations to the United States next year.
“It’s a game changer,” Rami Atallah, the chief executive of Ssense (pronounced “essence”), said of the planned move in an interview.
Mr. Trump has often said companies that want to avoid tariffs can set up in the United States. That Ssense and other Canadian companies are relocating suggests that his trade policies are in some cases having their intended effect.
Mr. Trump’s latest 50 percent tariffs on Canadian-made goods are expected to harm many Canadian companies. But Janet Park, an Ssense spokeswoman, said the company would not be much affected by the tariffs, because most of what it sells is not made in Canada.
Still, the tariffs Mr. Trump introduced last year weighed heavily on Ssense, which was struggling even before he took office. The company had grown fast during the Covid-19 pandemic when people were shopping online more, but when that came to an end, Ssense was stuck with too much unsold inventory.
And a landmark change in U.S. tariff policy helped force the company over the edge.
For years, U.S. consumers did not pay duties on purchases valued at $800 or less from overseas retailers like Ssense. But last year, the Trump administration got rid of that exemption, and American shoppers had to start paying tariffs for those goods.
“In terms of the impact on our performance, the tariffs were by far the largest,” Mr. Atallah said.
When buying items on Ssense’s website, American customers typically have to pay the tariffs when they check out. The sudden existence of the new, additional charges hurt the company’s sales in the United States, its biggest market. Before the tariffs, nearly 60 percent of Ssense’s customers were in the United States, but that dropped to 40 percent after the levies were introduced, according to restructuring documents.
Running out of cash, Ssense sought protection from its creditors a year ago and entered a court-supervised restructuring. Its implosion was a stunning comedown.
Ssense, which Mr. Atallah founded over two decades ago with his two brothers, Palestinian immigrants from Syria, had become a global destination for shoppers looking for the latest fashions. The company was valued at 5 billion Canadian dollars in 2021, when Sequoia Capital, a prominent Silicon Valley venture capital firm, became an investor.
Quebec’s government investment fund has so far not recovered any of the 21 million Canadian dollars it lent the company, a spokesman for the fund said. Other lenders, whom the company owed 179 million Canadian dollars, declined to comment on how much they got back in the restructuring.
Ssense, which has a store in Old Montreal, cut its work force to around 700 full- and part-time employees from 1,200 last year.
Most of Ssense’s inventory is imported from around the world to its warehouse in Montreal. From there, items are shipped to the United States and other countries.
Under its tariff workaround plan, Ssense intends to set up a big fulfillment center in the United States. Items from around the world will be housed there, and then sent to American customers.
To understand how having an American warehouse helps Ssense’s business, consider a cardigan made by Jacquemus, a French designer, priced at $990 on the company’s website. A customer from the United States would have to pay $97 in duties for that cardigan, or around 10 percent of the retail price. But if the cardigan were imported to a U.S. warehouse at a hypothetical wholesale price of $300, its tariff is likely to be around $30, a much lower duty.
And Ssense’s customers may not pay any U.S. tariffs themselves. Ms. Park, the spokeswoman, said it was Ssense’s “goal” to absorb the cost of the lower duties on items imported to the U.S. warehouse.
The company expects to open its warehouse in the United States in the first quarter of next year, somewhere in Northeast, she said. Another company, from the logistics sector, would run the facility, Ms. Park said, adding that Ssense could not yet estimate how many jobs might be created at the warehouse. Ssense will keep a fulfillment center in Montreal, from which it will ship to customers outside the United States. Its headquarters will remain in Canada.
After the Supreme Court declared one of Mr. Trump’s main tariffs illegal this year, some companies have gotten tariff refunds. Ms. Park said Ssense had applied for refunds but had yet to receive any. She did not say whether the company would pass on money collected under the tariffs to customers who had paid duties.
Mr. Atallah, his brothers and a Canadian investment firm, First Avenue Advisory, bought most of Ssense’s assets in the restructuring, to form the new Ssense. They paid 59 million Canadian dollars in cash, while assuming liabilities of 18 million Canadian dollars, according to restructuring documents.
Ms. Park declined to say whether the Atallahs or First Avenue has a controlling stake in the company. First Avenue did not respond to a request for comment.
To try to increase its chance of success, Ssense is now selling fewer items than it did, which reduces its need for cash, and it is using artificial intelligence to streamline some of its operations, company executives said. It is also planning to sell its own line of clothing, starting at the end of next year, Ms. Park said.
Still, Ssense faces plenty of challenges.
It must win back the trust of the fashion brands that supply it with clothes and accessories. Many of them were owed money when Ssense went into restructuring and have not recouped anything. Mr. Atallah said Ssense had lost almost no brands in the ordeal.
Ssense owed Simone Rocha, the London-based fashion label, over 200,000 euros, according to restructuring documents. A spokesman for Simone Rocha acknowledged the debt but added, “We believe in the future of their business and the strength of our longstanding relationship.”
And the corner of the retail world that Ssense operates in is brutally competitive. Other multi-line luxury retailers — companies that sell items made by many different designers — include online shops Net-a-Porter and Mytheresa and department store brands like Nordstrom and Saks Global, which recently emerged from bankruptcy under a new name.
“The multi-line space basically has seen more and more competition pretty much every year,” said Steve Dennis, president of SageBerry Consulting, which advises retail and consumer businesses.
In the first half of this year, spending by U.S. consumers on Ssense’s products was down nearly 60 percent from the same period in 2025, according to data on credit and debit card spending analyzed by Consumer Edge. Over the same period, sales at Net-a-Porter were flat and those of Mytheresa rose 29 percent, Consumer Edge said.
Ms. Park said Consumer Edge’s figures did not “line up with” Ssense’s numbers. She added that the company expected to be profitable in the 12 months through March 2027.
Mr. Atallah said: “We still believe in the company. We believe it has tremendous potential.”
