Montréal-based Ssense has reached an agreement with its lenders that will allow the online fashion retailer to continue operations with the support of fresh capital.
“With the support of our lenders, we now have the foundation to develop and implement a restructuring plan aimed at securing SSENSE’s long-term future,” Ssense co-founder and CEO Rami Atallah said. “We now have the time, resources, and structure in place to begin the process of rebuilding a stronger SSENSE.”
The company said it received approval from the Québec Superior Court on Sept. 12 to move forward with a restructuring plan under the Companies’ Creditors Arrangement Act (CCAA), staving off a potential quick sale by its lenders. The agreement allows Ssense to continue operations under its leadership team with nearly $40 million in interim financing, according to a filing viewed by BetaKit.
In a statement, Atallah said the court decision was “a critical step, marking the beginning of our next phase.”
The court filings show Ssense had assets of $387 million against liabilities of $371 million.
The new restructuring plan includes interim financing, including $15 million collectively from Ssense’s bank lenders, and $25 million from the company’s founders. Ssense’s lenders include the Bank of Montreal, the Royal Bank of Canada, Scotiabank, National Bank of Canada, and JPMorgan Chase. Ernst & Young is the court monitor appointed to supervise the restructuring.
Founded by brothers Rami, Firas, and Bassel Atallah in 2003, Ssense is an e-commerce retailer specializing in designer fashion and high-end streetwear with roughly 1,100 employees. The company also creates editorial content that highlights its retailer offerings.
Persistent liquidity issues had put Ssense and its lenders at odds. According to the filing, Ssense hired investment banking firm Greenhill in July to develop a restructuring plan that would satisfy lenders and allow the business to continue operating.
But Ssense’s lenders said they couldn’t agree to the refinancing plan. On Aug. 24, roughly $135 million of loans to Ssense matured, and lenders went forward with their own application to place Ssense under the protection of the CCAA Act and force a sale without the company’s consent on Aug. 27.
In a statement on Aug. 29, an Ssense spokesperson said they were “deeply disappointed” with the lenders’ decision and planned to fight for the company’s future with its own CCAA application.
The two parties reached an agreement on Sept. 6 “after intensive discussions and negotiations,” according to the filing.
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