Gloria Jeans, the federal network for the sale of clothes in the mass market segment in Russia, is going to close some of its production sites, particularly in the Rostov region.
According to the Russian news outlet Kommersant, the regional authorities explained this by trying to get the company to optimize its business processes.
The lack of qualified employees and low quality of local materials force Russian retailers from the fashion industry to transfer collections mainly to Vietnam, Bangladesh, Uzbekistan and other countries with cheaper labour.
Moreover, these Asian manufacturing countries have sufficient cotton cultivation, a steady supply of raw materials, and well-developed industrial facilities. This means no material supply issues and lower costs associated with fluctuating exchange rates, the outlet further reported.
When contacted, Gloria Jeans declined to comment.
The retailer's website indicates that the network owns 18 factories in different regions of the country.
A source associated with the situation told the news outlet that a sewing shop is closed in this region, for example, in Salsk. Employees of this enterprise were offered jobs in other factories.
China, which used to be the primary manufacturing destination for Russian clothing brands, is becoming less popular because, as a fashion industry representative explained, labour costs in China are far higher than in Bangladesh or Uzbekistan.
The Ministry of Industry and Energy of the Rostov Region explained that Gloria Jeans is optimizing the production process and abandoning leased production facilities.
At the same time, regional officials claim that production volumes remain at last year's level.
By the end of 2023, the total revenue of the retailer's two main legal entities—JSC Corporation Gloria Jeans and JSC Gloria Jeans—amounted to 96 billion rubles, which is 22.9% more year-on-year.
Vladimir Melnikov is the chain's founder and major owner. According to its own data, the chain managed 704 stores as of autumn 2024.
Olga Sumishevskaya, a partner at the consulting company One Story, said that Gloria Jeans closed some of its production facilities and is transferring the sewing of collections to partner factories or transferring this process to Asian countries, including Vietnam, Bangladesh, and Uzbekistan.
These countries have a raw material base and the necessary production facilities which will solve the problem of both the supply of materials and accessories, and somewhat optimizes costs associated with exchange rate fluctuations, she added.
Ksenia Ryasova, CEO of Finn Flare, said that setting up a clothing production in Russia requires a lot of financial resources. Moreover, Russian clothing manufacturers are experiencing an acute shortage of personnel.
Ilya Yaroshenko, CEO of Baon, said that the industry does not have enough training centers to meet companies' needs. There are also problems with materials and accessories for products. Importing is also becoming difficult due to problems with cross-border payments.
Experts said it is easier to import finished collections from abroad to the Russian Federation than to import raw materials and equipment and set up factories.
Regarding this, Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Dhaka Tribune that they will warmly welcome Gloria Jeans in Bangladesh if they wish to relocate production facilities here.
He also said that Bangladesh, the world’s second-largest readymade garment (RMG) manufacturer, is always an ideal destination for investing in clothing manufacturing, as required raw materials, accessories, and adequate government policy support are available.
“When an investment arrives, it arrives with technology, skilled and efficient staffs, and knowledge. Moreover, Russia is willing to enhance bilateral trade and business. The relocation of Gloria Jean’s factory can be a milestone in this regard,” he added.
