On the eve of fashion month, luxury Canadian e-tailer Ssense became the latest online giant to succumb to economic pressure, filing for bankruptcy protection in reaction to its investors seeking to sell the company. A champion of emerging runway labels, avant-garde streetwear, and a primary avenue for cult collectors of Comme des Garçons, Rick Owens, and Vetements, Ssense appeared on the surface as a rock-solid pillar of the contemporary online retail experience.
However, the multi-brand retailer joins a slew of high-end marketplaces that have struggled to remain afloat since the post-pandemic boom subsided. Matches Fashion, Farfetch, Luisaviaroma, Saks, and Net-a-Porter have all felt the impact of the economy, and most recently, profitable outlier MyTheresa is reportedly laying off 700 employees in a significant restructure.
Tariffs and the end of the de minimis rule were just the tipping point; high-cost inventory and operational complexities have been met with inflation and dramatic changes in consumer shopping behaviour over the last few years, leaving product margins on thin ice.
With the momentum of hyper-personalization and discovery-led AI shopping, luxury retailers must change gears to service customers with profitable assortments and personal curations. Let’s take a look at how fashion marketplaces can adjust to the future of online luxury retailing.
The collapse of luxury online retail
Ssense was the rare gem on the spectrum of fashion e-tailers; driven by its cultural relevance and an early adopter of cult labels, and followed the likes of since-shuttered concept stores, Colette and Opening Ceremony, in terms of its if-you-know-you-know factor. Its directional e-commerce styling and self-generating meme machine on social media set the benchmark for the new generation of luxury, and was valued at over US$3.6 billion in 2021.
But, like Matches Fashion, Farfetch, and Net-a-Porter, the cracks slowly began to show. The retailer laid off 100 staff in May, and sales dropped 28% in the first half of the year. Ssense increasingly held heavily discounted site-wide sales that no longer resembled insider fashion events, but reflected deeper cash flow issues in line with luxury fashion’s wider downturn. According to reports, Ssense had also been failing to pay deposits to its emerging brands. The end of the de minimis exception and Canada’s 25% import tariffs seemed to be the final straw, with the Business of Fashion reporting the US serves around 60% of the business’s revenue.
Similarly, LuisaViaRoma, the Italian pioneer of luxury e-commerce, had recently sought court protection to protect it from becoming insolvent. In a statement emailed to Vogue Business, CEO Tommaso Maria Andorlini admitted, “This is a challenging moment, but also the starting point for a new strategy. Luxury and online fashion are facing a structural crisis, and we, both retailers and brands, have made mistakes that we must now acknowledge.” Adorlini said price and value positioning, excessive product homogenisation, and a shift in spend to experiences had contributed to the multi-brand retailer’s downfall.
Iconic department store Saks also fell victim to the luxury slowdown, forming Saks Global amid an already turbulent financial status. In a $2.7 billion acquisition of Neiman Marcus Group in December 2024, Saks Global brought Saks Fifth Avenue, Saks Off 5th, Neiman Marcus, and Bergdorf Goodman together under a single luxury retail umbrella. Since the merger, Saks has experienced revenue losses, delayed payments to vendors, over 550 job cuts, and store shutdowns.
The problems facing luxury retailers
Though luxury sectors have historically remained stable in economic downturn (Hermès and Brunello Cucinelli are doing just fine), the accessibility of high-end multibrand retailers and their products caters to the wider aspirational market. The volume of product across Ssense, Farfetch, and Net-a-porter means the businesses can’t just rely on the 1%; they need the aspirational consumer, whose wallet share is significantly reduced during financial uncertainty.
Additionally, consumers have grown tired of the same-same online shopping experience, scrolling through page after page of products. There’s not only too much choice, but it's the same choices across the board that are losing customers. Something which luxury retailer MyTheresa recognised early, “If we add more and more products, we would actually be taking more time from her," Richard Johnson, MyTheresa’s Chief Commercial Officer, said in an interview last year.
As the retail landscape shifts, traditional online marketplaces are now being outpaced by monobrand DTC models with fewer SKUs, leaner operations, and more brand control. For the flailing retailers, a lack of targeted marketing and personal experiences with little focus on using data to present the right products to the right customers means shoppers have no obligation to remain loyal to any single online retailer or department store.
So, what happens when the only selling point left is the lowest price? Margins drop, excess inventory skyrockets, and profits flatline.
Now, the rise of AI and personal shopping like Daydream and ChatGPT makes these issues more complex. Consumers are slowly transitioning to hyperpersonalized product curation from enhanced search, conversation, and intuitive discovery. Instead of sifting through endless pages, they can simply type in preferences and be handed everything on a silver platter.
Where to from here for multi-brand retailing?
Luca Lisandroni, co-CEO of Brunello Cucinelli, remains confident in the relevance of and necessity for department store and multi-brand retailing. Speaking at the Altagamma conference, he said, “Multibrand stores are very important, because they train our ability to listen. It’s an extremely modern channel, much more relevant than we think, because it’s an open system. It puts brands face to face with a different point of view, that of the retailers who select and interpret our collections.”
Major department stores and online retailers now need to shift their focus to the elements of fashion retail that work to move the dial. Such as:
Focusing on profit
Ssense’s creditors are looking to quickly sell the retailer due to its poor cash position. To avoid spiraling out of control of costs and profit margin, retailers need to pull back from chasing after revenue and market share alone. Impressive revenue growth can create a false sense of achievement, masking deeper financial issues such as high operating costs, poor margins, or inefficient inventory management.
Accurate forecasting at scale
While retailers meticulously track sell-through rates and markdown percentages, very few have visibility on whether they’re getting better or worse at predicting demand. Missed sales opportunities are harder to measure than markdowns, but are just as damaging. Over time, poor buying accuracy eats into your margins, slows customer acquisition, limits scalability, and reduces team confidence.
Major marketplaces like David Jones and The Iconic have doubled down on accurately forecasting at scale, implementing software like Style Arcade to balance and analyze customer demand data in order to quantify assortments correctly by region, size, style, and store.
Communicating with wholesale partners
For luxury brands, high-street labels, and emerging brands, wholesale sell-through can make up a critical amount of business revenue. Visibility across wholesale and department store channels is essential for the partnerships to survive. With Style Arcade, brands like Ralph Lauren can now match supply with demand, and connect, manage, and share data across all channels, including David Jones, to increase alignment with Australian market demands.
Staying on top of tariffs
With the US tariff disruptions, retailers need to have the ability to visually quantify how duties, currency fluctuations, and sourcing decisions will affect margins before the changes affect the P&L. Style Arcade’s Margin Calculator allows better financial decision-making by simulating the financial impact of tariff changes or supply shifts to adjust RRP, volume, or source country instantly and plan proactively for supplier negotiations.
Luxury e-tailers and online marketplaces play an important role in product discovery for customers and increasing market share for fashion brands across the globe. It’s up to these retailers to keep up with changing technology trends, consumer expectations, and take back control of inventory levels in order to trade successfully into the future.
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