SSENSE shock, klarna-maxxing & wealth gap summer

“I think we've conflated consumerism for wealth..."

Hola!

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I’m back on UK soil. And I’m back writing again. I’m glad to be back.

It’s a new season. And just as it did last year, as soon as September rolls around, the temperature plummets. The bright sun makes way for grey skies. And the leaves fall off the trees.

It’s, lowkey, a vibe. The days are yet to become short so we’re still in that territory where the ushering of a new season feels exciting. I booked a Sunday pub roast. I bought a new winter jacket. I got the Hunter gumboots out. And I’ve already gotten caught biking in the rain.

But alas, onto the good stuff.

Agenda for today’s letter:

1. SSENSE shock

2. Klarna-maxxing and the ultimate wealth gap summer

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SSENSE shock

Money woes at Canadian “cool-luxury” retailer

c/o SSENSE

I audibly gasped when I got the alert from Business of Fashion last week. Ssense to File for Bankruptcy Protection After Creditors Push for Sale.

It was as confounding as it was shocking. This report, by Malique Morris, came entirely out of the blue. (As an aside, I was so delighted to see it was Malique who broke this story. I chatted with him many years ago when he was covering the DTC-beat. He was so lovely and kind and open to having a chat with a novice start-up founder like me.)

Up until this point, SSENSE had cemented itself as the ultimate cool-luxury retailer. A rare blend for the industry. The buy was ultra-cool and underground – stocking indie brands like Emily Watson, Service Projects, Fanci Club and Chopova Lowena. Mixing this with luxury brands, like Burberry, LOEWE, and Alaia, was unique. Different.

As James Frey noted in a book I devoured over the summer, Next To Heaven: “people [were] either rich or cool, and almost never both”. It seemed SSENSE serviced the cool and the rich which is a niche rarely catered to on mass.

It also had a trailblazing editorial platform, with articles that rivalled the likes of i-D, The Face and Dazed. (It’s no surprise that much of its (editorial) team was poached by i-D over the past year – Steff Yotka, Thom Bettridge, Alex Kessler and the like).

Given SSENSE had remained steadfast when much of the e-comm industry collapsed last year, this bankruptcy filing made it all the more shocking.

SSENSE owner, Rami Atallah sighted US tariffs as the core reason for its collapse. With 60% of its customer base coming from the US, and SSENSE orders being fulfilled in Canada, a huge chunk of its orders would now be subject to Trump’s 25% import tax, which seemed too much for it to bear.

Yet, as Malique reported last week, there was more to the bust-up than that. It’s fall was, supposedly, a “long time coming”.

bof

A post shared by @bof

For one, SSENSE’s infamous bi-annual sales had evolved into a kind of all-year-round discount offering. This ate into much of its profit margin, essentially transforming the business into a kind of off-price retailer.

There were, also, reports that the indie designer angle was a push to “save face” as many luxury brands moved on from the platform in favour of their own sales channels.

Malique reported on leadership challenges, too. Management were, supposedly, slow to enact initiatives that could’ve bolstered its margins and increased full-price sales.

(For those who want to go deeper into this, there’s a great podcast episode from BOF’s The Debrief with Malique discussing his reporting, which I highly recommend.)

The financial woes of SSENSE are a huge blow. SSENSE is highly loved and regarded. It’s a core source for discovery for consumers and brands alike. If it goes unrecovered, its collapse will be felt.

The consequences would be dire for many indie brands. (I’ve interviewed a designer in the past whose sales partnership with SSENSE was considered their “big break”.) There would, undoubtedly, be a gaping hole in the industry for consumers, too. 

My prediction is that it will be saved. I would be shocked if someone didn’t step in. As we’re seeing with Dion Lee’s comeback – the US retailer Revolve has invested in the brand following its collapse last year – brand equity has weight. When a brand is strong, beloved, and of a certain size, it’s rarely gone forever. That kind of loyalty is hard to come by and increasingly difficult to develop, particularly in an industry as fickle as this one.

I know I’ll be watching this story closely.

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Klarna-maxxing and the ultimate wealth gap summer

“I think we’ve conflated consumption for wealth…”

The summer vibes were supposedly “carefree” (source: Pinterest)

Vogue Business said this summer was a trendless one. In 2024, summer was BRAT. In 2023, it was Barbie. For the summer just passed, it was, supposedly, a summer of ‘blah’. Despite the abundance of Pucci, butter yellow, scarves and flip flops, it had no homogenous vibe or theme. Vogue Business said this was to be expected; reflecting the uncertainty of the current political and economic climate.

I, however, think differently.

For me, this summer was the ultimate wealth gap summer. A summer where the duplicitousness of our inward financial turmoil and outward carefree attitude punctuated the air, our feeds and social groups.

You would be forgiven if you perceived this summer as one of excess. As it is every year, seemingly every man, woman and their dog galavanted across Europe. Rounds of €20 cocktails were placed on €45/day beach beds. Blurry videos from inside clubs with €70 entry fees were dotted amongst the mirror selfies of individuals clad in multiple-hundred-euro dresses; thousands of euros of cosmetic tweakments barely visible across faces.

That euro summer mood (source: Pinterest)

But beneath this veneer of boom-boom aesthetics and frivolity, loomed reports of klarna-maxxing, recessions, tarrifs and the ever-increasing cost of living crisis.