Sign In

SSENSE enters CCAA to restructure $371m debt and pursue sale or refinancing

Bottom Line Impact

Absent additional financing and a rapid shift to an asset light model, revenue risk from vendor pullbacks and higher returns could pressure margins by 200 to 400 bps and cede share to better capitalized rivals, but a well executed dual track process can stabilize liquidity, preserve brand equity, and position SSENSE for a value maximizing sale or leaner standalone recovery.

Key Facts

5
  • Court approved CCAA protection enables operations to continue under CEO Rami Atallah and founders, with Ernst & Young as monitor
  • $40m interim financing secured to fund payroll and operations ($15m banks, $25m Atallah family)
  • 2024 revenue reported at $1.3b; total debt $371m including $229m owed to banks and trade partners, implying debt to revenue of ~28.5 percent
  • Vendors are tightening credit, with some holding shipments or requiring prepayment to limit exposure
  • Court supervised process allows SSENSE to solicit investment, refinancing, and sale offers with creditor alignment

Executive Summary

SSENSE secured CCAA protection with $40m interim financing, preserving operations under current leadership while Ernst & Young oversees a court supervised restructuring and potential sale. With $1.3b in 2024 revenue but $371m in debt, near term liquidity and vendor confidence are the critical swing factors that will determine whether SSENSE emerges as a leaner marketplace led platform or is sold to a strategic or financial buyer.

Actionable Insights

Immediate Actions (Next 30-90 days)
Run a dual track process: formal sale exploration with a 90 day timeline while executing an asset light pivot to reach 30 percent marketplace and consignment mix within 6 months
Rationale: Maximizes optionality and valuation while immediately lowering working capital needs and vendor risk
Role affected:CEO
Urgency level:immediate
Secure an additional $60m to $100m of DIP style financing to extend liquidity runway to 9 to 12 months and implement a 13 week cash flow war room with weekly vendor payment waterfalls
Rationale: Reduces refinancing risk, stabilizes vendor confidence, and creates time to execute restructuring or sale at better terms
Role affected:CFO
Urgency level:immediate
Short-term Actions (6-12 months)
Rebase buy plans by cutting long tail seasonal SKU intake by 25 to 35 percent and shift top 50 brands to partial consignment or drop ship with 20 to 50 percent prepayment where necessary
Rationale: Protects cash and reduces markdown risk while preserving hero SKUs and key brand relationships
Role affected:Chief Merchandising Officer
Urgency level:short-term
Deploy proactive trust messaging and a service guarantee program with 2 to 3 percent store credit on delayed orders, and temporarily narrow returns window to 21 to 28 days
Rationale: Mitigates conversion risk and protects NPS while improving cash conversion and lowering reverse logistics costs
Role affected:CMO
Urgency level:short-term

Risks & Opportunities

Primary Risks
  • Liquidity gap if vendor holds and elevated return outflows exceed the $40m interim facility
  • Vendor allocation loss and assortment gaps if prepayment requirements cannot be met
  • Customer confidence erosion leading to higher cancellations and lower repeat purchase rates
Primary Opportunities
  • Reset cost base and inventory model to an asset light marketplace with improved cash conversion
  • Court supervised process to secure strategic investor or buyer at a going concern value
  • Vendor term restructuring to consignment or drop ship, reducing markdown and obsolescence risk

Supporting Details

4
Back to SSENSE All Companies