Ssense has quietly grown into one of the well-known brands in the luxury fashion retail field. It has recently received financing from Sequoia Capital, with a valuation of more than US$5 billion. Never heard of it? This is great for Atallah-he has fashionable young clients in 150 countries and is about to expand in China

This story is part of our annual CEO package. Every year, "Business Report" magazine recognizes five business leaders who have made outstanding contributions to Canada.

Alexi Hobbs/The Globe and Mail

For a while, Rami Atallah almost had to beg for attention. In 2008, he ran Ssense, an emerging online fashion retailer in Montreal, and decided to switch from selling mainstream clothing to luxury clothing. There are two problems: no one knows who he is, and Atala himself hardly knows who the industry giants are. His research on the luxury market eventually led him to the headquarters of the Parisian fashion house Balmain.

A few years ago, Alain Hivelin rescued Balmain. He oversaw the transformation from selling classic blazers to crystal dazzling ripped jeans and other rock star style clothing. Atallah, who was only in his 20s at the time, wanted to persuade Hivelin to sell Balmain's clothing on Ssense. He had an appointment with a salesperson and wanted to talk to the CEO in person. He wandered outside Hivelin's door all day, had lunch, and held several meetings, until the CEO finally pityed. Atallah introduced him to Ssense and how consumers are eager to buy luxury goods online. In Atallah's account, his persistence reminded Hivelin of his courage when he was young, so he thought of this idea. Atallah made a deal. (Severin died in 2014.)

Atallah no longer needs to wander outside the door of the fashion elite. Ssense is the mainstay of multi-billion dollar luxury fashion, providing more than 700 brands to a growing international fan base. The company operates on a wholesale model, offering the names you expect, such as Balenciaga and Versace, as well as the lesser-known brands that affluent consumers who see clothing as a sign of art, identity, and status expect. This may be the only place where you can buy a vegan leather monogram beret, a $6,000 Givenchy handbag and luxury slacks from the "Anonymous Seoul Design Collective" from a Polish streetwear brand, and within a few hours Deliver it to your doorstep. Recently, Ssense added a section called "Everything Else", which includes children's clothing, pet products, and home decoration.

Atallah, 39, supervises Ssense and its 1,500 employees (including temporary employees) with his brothers Firas and Bassel, who serve as chief governance officer and chief operating officer. (Atallah is the middle sibling.) They saw the potential of online fashion retail early on, especially high-end products. Luxury retailers have long used exclusivity as their selling point, and their online migration has been slow, which allowed Ssense to flourish. "We just realized that there is more demand and less allocation of luxury space," Atala said.

Since launching the website in 2006, Atallah has developed the company by curating extensive but well-thought-out designer choices, implementing simple designs, and shaping Ssense into its own brand. The name has a certain mystery that is difficult to define, except that it exudes a refined coolness. Despite its size, Ssense still oscillates between underground brands and mass-market brands. For those in the know, this is a fixture, but it may cause other people to stare blankly.

For Ssense, the next few years may be transformative-and risky. The company received external financing from Sequoia Capital China for the first time this year, with a valuation of more than US$5 billion. Having a few investors also means that Ssense is essentially an isolated family business that must be open to the outside world. The board of directors has long been composed of Atallah, his brother and his parents, but a partner from Sequoia has since joined. With this funding, Ssense plans to penetrate deeper into China, a market that is full of challenges for foreign companies. In addition, it hopes to launch its own clothing brand for the first time next year. "So," Atla said with a smile, "there are many concerns."

For those who are biased towards the standard of dressing choices, browsing Ssense is like sliding into another fashion world, where everything is familiar, but just a little off. There was a problem. Why does that T-shirt cost $650? Those women's pants worth $1,690...are they crocheted? Where would you wear a green wool sheepskin gown worth $11,000? Should it be paired with a $930 matching glove similar to a snowman's paw?

The aesthetics are minimalist, the Ssense model is always shot on a pure white background, without shadows or any other hints of a connection with geophysics. No one smiles. The models stared into the abyss, and saw the free look of the abyss looking back. Even the child model wearing a $970 cashmere cardigan looked gloomy. The only exception is Shiba Inu, who seems very happy to wear a $935 denim harness.

Each item (approximately 120,000 pieces per year) was shot in the studio at the company's headquarters. Ssense designed the complete outfit, including hair and makeup, and the final presentation was more like a fashion magazine than an online retailer. Atallah said this method is more costly, but it helps establish identity. "People tell us that they can see photos from Ssense anywhere on the Internet and know it's us," he said.

These photos are the source of unlimited desire for Ssense customers. Ciera Parker, a 27-year-old New York girl, has always loved fashion. A well-planned costume can move her, just as a painting can move her heart. A few years ago, she bought Ssense for the first time, a pair of Raf Simons sneakers, and has been her loyal customer ever since. "I'm fascinated," she said. Parker browses Ssense every day for fashion inspiration, just like she browses Instagram, but limits her purchases to once a month. "It's like a shopping apple. It's seamless," she said. "You all understand, Canada."

Parker is not alone. Fashion influencers on YouTube, Instagram and TikTok posted about their Ssense shipping and trading tips in preparation for the upcoming sales event. Search on Twitter and you will find some people lament that they have no money to spend on Ssense, and some lament that they spend too much money on Ssense. Some people begged to quit drug addiction. "I need to delete Ssense from my phone," a recent user wrote. A few days ago, someone else wrote, "I need to delete Ssense from my memory."

There is a Ssense retail store in the world, which occupies a narrow five-story building in Old Montreal. This shop is open to walking, but because Atallah wanted to do something different, it was designed to be based on appointments. Online, customers choose the clothes they want to try on, and everything is shipped from a nearby company distribution center. Deanna Chow, Ssense's senior communications director, told me that when we visited the store, there were 40 to 50 appointments per day, which would double on weekends.

Ssense commissioned the British architect David Chipperfield to design this space in 2015, and it took about three years to complete. The interior is wrapped in custom-made dark gray sandblasted concrete, and even the style of the pandemic is exquisite: the hand sanitizer at the front door is completely hidden in a smooth metal pillar. The fifth floor is a slim cafe serving "adaptive" drinks ("super food and stuff", Zhou Clarification), while the rest of the space is made up of a limited number of strange and wonderful costumes. An employee wore a belted jacket that stretched to the calf, which looked like a fluffy woolen towel. Zhou said that Teddy-style fabrics are very popular now, and there is indeed another coat that looks like hanging on a nearby mannequin, retailing for $1,500. For people whose wardrobe comes mainly from Gap (ie me), this is a magnificent place.

However, Atallah came to accept our interview with a relaxing presence, an enthusiastic person with a ready smile. Although the company's marketing materials insist that Ssense is pronounced es-uhns, Atallah chose a more prosaic essence. In addition to the leopard print on the sneakers, he is also wearing all black (jacket, T-shirt, skinny jeans). He has no background in fashion, nor does his brother. Instead, he studied computer engineering.

The brothers and sisters were Palestinians who grew up in Damascus, where their father was engaged in the steel trade. In addition to being a competitive tennis player, Atallah also became interested in the only computer in the house, navigating in MS-DOS. When he was 15 years old, his family left Syria for Montreal, partly because his parents wanted to ensure that their children received a decent education and were free from mandatory military service. Arriving in Montreal was a complete culture shock for Atallah. His first attraction was a row of strip clubs on St. Catherine Street.

Later, he studied computer engineering at the Montreal Polytechnic Institute, and at the same time established a side business-buying menswear from a store and flipping clothing online. In the first month, he made $15,000. Success prompted him to consider starting his own business, and in his engineering paper, he wrote an e-commerce platform that became the foundation of Ssense. The website was launched in 2006 (previously a physical store), and earlier, Atallah contacted his family about investment issues. His parents mortgaged their house and invested a small sum of money that Atallah said.

At first, the three brothers handled almost everything by themselves: customer service, coding, design, photography. This experience gave Atallah a deeper understanding of the business, so he can go deep into any field if necessary. "If people tell me something untimely, I can call them out," he said, noting that he was trying to stay focused on the big picture.

A few years after starting a business, Ssense began to focus on high-end clothing. It is not the first company to do this-Net-a-Porter is probably the most famous company in the field, launched in 2000-and the field is highly competitive. But Ssense took a different approach. It combines traditional luxury brands with streetwear, which is a broad term for more casual but stylish clothing, inspired by hip-hop, skaters and other youth subcultures. Atallah said it seems obvious now, but the two parts were previously separate.

Thomas Serdari, an adjunct professor at New York University who studies the luxury goods industry, said: “Ssense exudes the coolness of the new creative class, such as artists, DJs and designers, who want to dress well.” These buyers don’t necessarily choose expensive prices. Traditional name. Serdari compares Ssense customers to those who haunt Barneys, a now-defunct but legendary New York luxury retailer that has been at the forefront of high-end fashion for decades. "This is a very cutting-edge luxury, people who really have opinions and are not afraid of making mistakes, if they are wearing something a little out of the ordinary," she said.

The first thing you see on the Ssense website is not actually the clothing for sale. Instead, Ssense features editorial content—interviews with artists, photographers, musicians, designers, and creative people of all kinds. "The editorial is our tool for presenting our thoughts and ideas," Atallah said. This is another way for Ssense to stand out among its peers whose website is a pure e-commerce platform. In addition, these articles—for example, about a Korean artist who made sculptures that resemble balloon animals, or an interview with an active American musician like Dev Hynes—bringed a zeitgeist to Ssense, which was trying to attract It's important when you are young customers. People between the ages of 18 and 34 already account for nearly three-quarters of income, and for clothing retailers, it is unusual for men to account for half of sales.

Atallah said that he and his brothers wanted Ssense to become international from the beginning, with approximately 75% of sales coming from abroad, with the United States accounting for the largest share. (Canada, Japan, South Korea, and China rank in the top five.) Ssense launched the Japanese version of its website in 2016, followed by simplified Chinese and Korean. Atallah said that there are some broad customer groups in the world, starting with wealthy kids (although his language is more diplomatic). Artists, musicians, and other creatives are extravagant, and so are young entrepreneurs. Some people may only shop during the discount period.

Popularity means constant expansion. Chief Operating Officer Bassel Atallah said: "We have to relocate or expand our fulfillment center every year or two to accommodate growth." He added that the company receives thousands of orders every day. Ssense opened a 720,000 square foot distribution center in Saint-Laurent (three times the previous one) in 2019, and opened another in Europe last year. Most North American deliveries arrive within three days, and Bassel said the company has been looking to speed up deliveries to increase customer retention.

Equally important is that Ssense must keep up with the times and look for promising designers to keep customers returning. This is a widely assumed responsibility within the company. For example, there is no creative director. "This is a kind of collective creativity that we have," Atallah said. "We have real experts in every creative field, and they know what's going on very well."

Not long ago, Ssense contacted Remington Guest and Heather Haber, the founders of a store called Advisory Board Crystals (ABC) in Los Angeles. "The best thing to say is that we are a couple of artists who run fashion brands," Guest said of ABC. He doesn't like to describe their clothes as streetwear, but they are more casual and affordable. The couple thought deeply about the way they produce and sell their clothing. You almost expect every piece of clothing to be accompanied by an artist's statement describing the intention behind it. ABC collaborated with Wikipedia to produce T-shirts with the satirical slogan "Internet Master", and together with Chinese artist Ai Weiwei produced a limited series of hoodies. Guests think their customers are "very smart".

Ssense understands this. "They put the blame on us, like what can we do together?" he said. In turn, Guest and Haber launched a basic series called ABC 123, including hoodies, sweatshirts and sweatpants. (If you ask Guest their motives, he will start to digress, about Levi's, Dickies, traditional brands and "the cornerstone of existence".) This line has only been launched for a few weeks, and Guest does not have exact sales figures, Ssense Ordered more recently. "Based on my experience in fashion, if it doesn't sell well," he said, "They will let you know."

Ssense is smaller than some of its competitors. For example, Farfetch, headquartered in London, is worth 15 billion U.S. dollars and trades on the New York Stock Exchange. However, profitability is elusive. Farfetch has been struggling to cope with high marketing and technology costs. Despite growing sales, it still lost $3.3 billion last year. However, Atallah claimed that Ssense had been profitable for many years due to the financial discipline of the monastery. (He will not disclose the exact number, or even the income range.)

Private equity firms have knocked on the door in the past, but Atallah has never been interested in financing. Sequoia Capital China changed this situation. Atallah was very impressed with Sequoia's track record, not to mention that Cecilia Cheung, the former editor-in-chief of "Vogue" China, joined as a partner. "She knows Chinese consumers very well," Atala said.

Cheung first heard about Ssense through young stylists and fashionistas, and was curious about how they visit the site every day. For her, further expansion into China seems natural. "They already have a large number of young followers in China. Once Ssense enters China correctly, they will be very excited," Zhang wrote in an email. The funding was announced in June (the amount was not disclosed), and Cheung has a place on the Ssense board of directors.

When asked about China's strategy, Atla was very cautious. The first step will be to establish a local distribution center in the next year or two to provide faster transportation, lower costs and better customer service. "Today, they still buy from us, although it is not the most ideal," he said, "because we have a lot of products that cannot be bought there."

China, where luxury goods sales soared 48% last year, is certainly the top priority for competitors. For example, last year, Farfetch received $1.1 billion in investment from Alibaba and luxury goods group Richemont to develop in China. Cheung believes that Ssense has advantages for young Chinese consumers. She wrote: "They are less sensitive to the concept of value for money, and prefer products and brands that speak to them."

Expansion will only put more pressure on Ssense, making them hoard clothing that consumers desire no matter where they are. To this end, the company quietly launched a brand development plan and plans to launch its own clothing next year. "There are many people in our community, whether they are photographers, artists or creative people from other fields, they are all interested in launching their own fashion brands," Atala said, "We want to create a platform to amplify these voices. "He doesn't think this is a huge leap for Ssense, and explains that everything the company does is a deliberate gradual process.

After years of careful development, Ssense will not take risks in business. This risk seems to exist only in the fashion field.

Your time is precious. Conveniently send the Top Business Headlines newsletter to your inbox in the morning or evening. Register today.

Build your personal news feed