Gloria Jeans is back. The store that officially sold the first Levi’s jeans in Russia after the collapse of the Soviet Union has closed a deal to take over Sweden’s H&M flagship store on Tverskaya, the main thoroughfare in Moscow, Vedomosti reported on March 10.
Bidding for what was the largest H&M store in Russia in the prime shopping location in the Russian capital, Gloria Jeans has taken its place at the corner of Tverskaya Street and Pushkinskaya Square at 16 Tverskaya.
H&M is among the 1,000 foreign brands that have pulled out of Russia since the invasion of Ukraine a year ago. It was at the address from 2017 until 2022 and Russia was one of its biggest and fastest growing markets until it decided to exit. In November 2022, the last of H&M's Russian stores finally closed.
Gloria Jeans was a pioneer of Russian modern retail when it opened its first store about 10 minutes’ walk away on the corner of Pyshechnaya street and Neglinnaya – at the bottom of hill that runs from another Moscow retail legend, the Soviet-era department store TsUM to Lubyanka square that is home to the former KGB headquarters and Detski Mir (Children’s World), the Hamley’s of Russia. These few blocks are home to many of the most prestigious international and Russian brands and a stone's throw from the Kremlin.
Gloria Jeans was one of the first Russian companies to organise the import of Western jeans and had queues around the corner in its first year of operation as Muscovites lined up to buy Levi’s jeans and other hard-to-find Western brands.
The Russian chain has stayed in business since then, but was quickly overwhelmed as the Western brands arrived en masse to sell directly to any number of outlets, including TsUM at the bottom of the hill.
Sanctions have been a blessing for the few modern Russian brands that managed to establish themselves since 1991, as they already have some name recognition and are able to step into the hole created by the wholesale departure of their one-time rivals.
Gloria Jeans’ new store in Moscow, which will be the largest in the network of the Russian retailer, will occupy three floors of the six-story building of the Actor Gallery. The building, which was erected in 1881, has a total area of 18,000 square metres. The State Oil Fund of Azerbaijan has owned the building since 2012, after buying it for $133mn. The total retail floor space of the building is 5,800 sqm, while the office space is 12,200 sqm.
According to real estate consultants, the objective market rental rate for a store on Tverskaya is about RUB20,000 ($263) per year per square metre, which is about RUB100mn ($1.3mn) per year. However, Gloria Jeans offered an amount that is 1.2-1.5 times more than this market rate, Vedomosti reports.
Vladimir Melnikov, chairman of the board of directors of Gloria Jeans, said: “The competition for the opportunity to open a store in this place was huge.”
The Gloria Jeans chain opened its stores in December 2022 in several areas previously occupied by H&M. By the beginning of March 2023, the retailer had opened about 20 stores in former H&M locations, and plans to increase the network by 130 outlets by the end of the year. Currently, Gloria Jeans has 675 stores.
According to the company's unaudited management accounts, Gloria Jeans' revenue in 2022 was RUB70bn ($921mn), which is 15% more than in 2021. The group's online sales reached RUB9.5bn.