SSENSE Files for Bankruptcy Amid Luxury E-commerce Downturn, Contrasting with DraftKings' Strong Growth

Montreal, QC – Luxury e-commerce platform SSENSE filed for bankruptcy protection on September 3, 2025, revealing CAD 145 million in debt to creditors. This significant financial distress places the company within a critical recession phase impacting the broader luxury digital commerce industry. The filing challenges notions that consumer spending on such platforms acts as a "liquidity sink" to prevent inflation.

Founded in 2003, SSENSE had been a prominent online retailer known for its curated selection of high-end fashion and streetwear, achieving a valuation exceeding CAD 5 billion in 2021. However, court documents indicate that lenders lost confidence in the company's operations, citing "inventory management problems" that emerged in July 2025. This downturn aligns with a broader trend of financial struggles in the luxury e-commerce sector, with other multi-brand retailers like Matches Fashion and LuisaViaRoma also facing insolvency.

In stark contrast, online sports betting and iGaming giant DraftKings reported record financial performance for the second quarter of 2025. The company announced $1.513 billion in revenue, a 37% increase year-over-year, alongside record net income of $158 million and Adjusted EBITDA of $301 million. DraftKings maintained its 2025 revenue guidance of $6.2 billion to $6.4 billion, reflecting continued strong customer engagement and efficient acquisition strategies.

The divergent fates of SSENSE and DraftKings bring into question the simplistic view of consumer spending as a uniform "liquidity sink" preventing inflation, as suggested by some. A recent social media post stated, > "why would there be significant inflation when we have wonderful liquidity sinks like SSENSE and DraftKings." While consumer spending does absorb money from the economy, the current landscape shows that this absorption is not uniform across all sectors.

Economically, inflation is an increase in the general price level, reducing purchasing power, often influenced by the money supply. While strong consumer spending can indicate economic activity, it does not inherently prevent inflation if that spending is concentrated or if other factors, such as supply chain issues or monetary policy, are at play. The struggles of SSENSE suggest a contraction in discretionary spending within the luxury segment, while DraftKings' success points to robust activity in online entertainment and gaming.

The current economic environment highlights a complex interplay of factors, where some sectors thrive while others face severe headwinds. SSENSE's bankruptcy underscores the fragility of certain consumer markets, even as companies like DraftKings demonstrate resilience and growth, illustrating that the impact of consumer spending on overall inflation is multifaceted and dependent on specific industry dynamics.