Lenders to fashion retailer Ssense are seeking approval from a Canadian court to allow a swift sale of the company, with initial bids expected to be submitted by early October.
The lenders are owed approximately C$145 million, according to Bloomberg, and want to have fashion firm placed under a monitor pursuant to Canada’s Companies’ Creditors Arrangement Act.
“At this stage, the lenders have lost confidence in Ssense’s ability to manage its operations,” a group of creditors led by the Bank of Montreal said in an application to the Superior Court of Quebec.
Others involved include the Royal Bank of Canada, JPMorgan Chase & Co, the National Bank of Canada, and the Bank of Nova Scotia.
It comes after Ssense filed for bankruptcy protection last week, after what it described as an attempt by lenders to force a sale of the company.
“We are deeply disappointed in this decision, which we believe does not serve the long-term interests of our 1,000+ employees, vendors and partners,” a spokesperson for Ssense previously said. “We will be filing our own CCAA application to safeguard the company, retain control of our assets and operations and fight for the future of this business.”
The Companies’ Creditors Arrangement Act is a process similar to bankruptcy protection that allows firms to restructure their finances.
Ssense’s struggles have been attributed to the Trump administration’s trade policies, particularly the 25% tariffs on goods imported from Canada.
The removal of the “de minimis” exemption, which previously allowed packages worth less than $800 to enter the US duty-free, took Ssense by “surprise” and directly contributed to its CCAA filing.
It came amid an already challenging year for Ssense, which has also been hit by a slowdown in the luxury market that has affected its primarily young, aspirational customer base.
Ssense was founded in 2003 by brothers Rami, Firas and Bassel Atallah. Headquartered in Montreal, it features a mix of established and emerging luxury brands, particularly appealing to the growing young, fashion-conscious demographic.