--- title: "Gloria Jeans Lost About $1 Billion in Russian Sewing Factories Due to Sanctions and Moved Production to Asia" description: "Gloria Jeans lost about $1 billion in investments in Russian sewing factories due to sanctions and moved production to Southeast Asia, while another $200 million in investments was wiped out in Ukraine." date: 2026-09-11T09:44:01.000Z lang: en url: https://xab.info/en/posts/gloria-jeans-loses-1-billion-due-to-sanctions-moves-production-to-asia tags: [gloria-jeans, russia-sanctions, textile-industry, manufacturing, southeast-asia] publisher: "XAB.info" --- # Gloria Jeans Lost About $1 Billion in Russian Sewing Factories Due to Sanctions and Moved Production to Asia ![Gloria Jeans garment factory workshop: workers at industrial sewing machines processing denim fabric before production moves to Asia](https://xab.info/media/2026/09/11/gloria-jeans-poterya-milliarda-iz-za-sanktsiy/gloria-jeans-poterya-milliarda-iz-za-sanktsiy-1.webp) ## 🎯 Key Points - Gloria Jeans invested about $1 billion in Russian sewing factories over 30 years and was forced to abandon them due to sanctions. - Production was "very quickly" relocated to Southeast Asia amid rising wages in Russia to $800–1500 versus $200–500 in Asia. - Another $200 million of the company's investments in production in Ukraine were, according to Vladimir Melnikov, wiped out due to the war. Gloria Jeans, one of the largest clothing manufacturers and retailers in Russia, invested approximately one billion dollars in its own sewing production facilities within the Russian Federation, only to be forced to abandon them, according to its founder and CEO Vladimir Melnikov. As reported by RBC-Ukraine citing The Moscow Times, the investments accumulated over 30 years, but after the start of the full-scale war in Ukraine, it became extremely difficult to keep the enterprises running. According to the company's assessment, it was precisely the sanctions pressure and its consequences that led to the capital put into Russian factories being effectively lost. ### The Blow of Sanctions to the Production Base Vladimir Melnikov explained that after sanctions were imposed on Russia, the company's access to the technologies and resources needed for sewing production sharply declined. "With our own efforts, we were unable to maintain production at the level of the 90s and early 2000s – we lacked both money and resources," he stated. Thus, even the long-accumulated production base could not be maintained at its previous level without external technological and material supplies, which, according to the head of the company, made continuing the operation of its own Russian factories economically unviable. ### Rising Wages as an Additional Factor The situation, according to The Moscow Times, was compounded by a sharp rise in wages in Russia in 2023–2025: they grew from $300–500 to $800–1500, while in Asian countries they remained at the level of $200–500. This gap in labor costs further undermined the competitiveness of Gloria Jeans' own Russian production and accelerated the decision to move output abroad, where labor is significantly cheaper. ### Relocation of Production to Southeast Asia and Losses in Ukraine After deciding to abandon its own factories in Russia, Gloria Jeans, according to Melnikov, had to "very quickly" relocate production to Southeast Asia. Separately, the company's head stated that due to the war he lost $200 million in investments in production in Ukraine, which, as reported by RBC and Mail.ru, were effectively "wiped out." Taken together, this makes Gloria Jeans one of the most telling examples of how sanctions policy and the military conflict are reshaping the geography and economics of major Russian civilian business. ### Contradictory Data The public wording contains a nuance in the assessment of losses. On the one hand, headlines and announcements speak of the company having "lost" about one billion dollars; on the other hand, Melnikov himself characterizes this amount as investments made over 30 years, into which he had to "abandon" further investment due to the inability to sustain production, rather than as a one-time loss over a single period. Moreover, the $1 billion invested in Russian factories and the $200 million lost in Ukraine are presented as two separate items. The exact breakdown between "frozen" capital, written-off assets, and actual monetary losses is not disclosed in open statements, so the final figure of total losses remains an estimate based on the words of the company's head himself. ### Context: Civilian Business vs. the War Economy The Gloria Jeans case fits into a broader trend: according to the Ukrainian Foreign Intelligence Service, civilian business in Russia is increasingly losing out to the war economy. Due to sanctions and the war, the civilian sector is forced to cut production and personnel, while state resources are being redirected in favor of the defense complex. Relocating sewing capacity to Southeast Asia becomes for the company a way to preserve its retail network, albeit at the cost of losing its own production sovereignty in Russia and Ukraine. ## 🔍 Fact-Check Verification - [Russian sewing giant lost a billion dollars due to sanctions and moved factories to Asia](https://www.rbc.ua/ukr/news/shveyniy-gigant-rf-vtrativ-milyard-dolariv-1789119556.html) - Основной источник: заявление Владимира Мельникова о $1 млрд инвестиций, санкционном давлении, росте зарплат и переносе производства в Юго-Восточную Азию. - [Gloria Jeans owner: $200 million invested in Ukraine was "wiped out"](https://finance.mail.ru/article/vladelec-gloria-jeans-vlozhennye-na-ukraine-200-mln-obnulilis-69227193/) - Подтверждает потерю $200 млн вложений в производство на Украине по словам владельца компании. - [Gloria Jeans owner reported the wiping out of $200 million invested in Ukraine](https://www.rbc.ru/business/11/09/2026/6aa2f9ab9a79473251d3fd06) - Независимое российское издание подтверждает цифру $200 млн по Украине, согласуется с основным нарративом. ## ❓ FAQ ### Q: How much did Gloria Jeans lose due to sanctions? **A:** According to the company's founder and CEO Vladimir Melnikov, about one billion dollars in investments in Russian sewing factories, plus another $200 million in investments in production in Ukraine were wiped out due to the war. ### Q: Where did Gloria Jeans move its production? **A:** Production was "very quickly" relocated to Southeast Asia after the company abandoned its own Russian factories. ### Q: Why did the company abandon its Russian factories? **A:** Due to sanctions, access to technologies and resources sharply declined, and wages in Russia in 2023–2025 rose to $800–1500 versus $200–500 in Asia, which made in-house production uncompetitive.