Russian clothing giant loses $1 billion to sanctions and moves production to Asia

Gloria Jeans, one of the largest clothing manufacturers and retailers in Russia, invested about $1 billion in garment production facilities in Russia, which it was eventually forced to abandon. This was stated by the company's founder and CEO, Vladimir Melnikov.

According to him, the investments were made over 30 years, but after the start of the full-scale war in Ukraine, it became difficult to keep the facilities operating.

"When sanctions were imposed on Russia, our access to the technology and resources needed for production sharply decreased. On our own, we were unable to maintain production at the level of the 1990s and early 2000s — we lacked both money and resources," Melnikov said.

According to The Moscow Times, the situation was worsened by a sharp rise in wages in 2023–2025: they increased from $300–500 to $800–1,500, while in Asian countries they remained at $200–500.

After deciding to abandon its own factories in Russia, Gloria Jeans had to move production to Southeast Asia "very quickly." Melnikov also said that because of the war, he lost $200 million invested in production in Ukraine.

Civilian businesses in Russia are increasingly losing out to the war economy. According to Ukraine's Foreign Intelligence Service, sanctions and the war are forcing the civilian sector to cut production and staff, while the country's resources are being redistributed in favor of the defense industry.