Kommersant learned of Gloria Jeans’ plans to close part of its production plants

The company owns 18 factories in southern Russia. The Ministry of Industry and Energy of the Rostov region told the publication that the company is “optimizing the production process” and its production will remain at last year’s level.

According to Rusprofile, the total revenue of the retailer’s two main legal entities, Gloria Jeans JSC and Gloria Jeans Corporation JSC, amounted to about 96 billion rubles at the end of 2023, almost 23% more than in 2022. The founder and head The network’s board of directors remains 76-year-old Vladimir Melnikov. Forbes estimates his wealth in 2024 at $1.7 billion, placing him 80th on the list of the richest people in Russia for 2024.

According to Ksenia Ryasov, CEO of Finn Flare, the seamstress profession is not prestigious now, even taking into account the relatively high salaries in the industry, and the opening of new production facilities in Russia requires large financial costs and has a low return. of the investment.

Olga Sumishevskaya, a partner at consultancy One Story, suggested that the closure of several production facilities may indicate that Gloria Jeans is transferring clothing production to partner factories or to Asian countries with cheaper labor, such as Vietnam, Bangladesh and Uzbekistan. These countries have their own cotton production, as well as the necessary associated production facilities, which solves the problem of logistics of materials and accessories and allows reducing the price of goods by optimizing the costs of currency volatility.

At the same time, Russian manufacturers cannot provide accessories and materials of the required quality, and the country has a shortage of sewing equipment, which has to be imported from abroad with all the ensuing problems of cross-border payments, emphasized Ilya Yaroshenko, general director. of Baon. According to him, it is more profitable to import batches of ready-made clothing to Russia than raw materials and accessories.