A conversational account (two speakers) describing how Speaker B bought and transformed a run-down Soviet-era sewing factory after the USSR collapse. Key steps: privatizing assets, finding investors, selling underused real estate (office building, opening and selling a renovated cafeteria/restaurant), renovating manufacturing and retail stores, securing Western-brand contracts (first to manufacture Adidas in Russia), and exiting by selling to other investors. The initial venture began in 1994 and involved about 100 factory employees at risk of bankruptcy.
Questions this video answers
1994.
About 100 people.
Adidas.
Chapters
And you have this sewing factory, for example, that was run by bureaucrats. They may not have any idea how to build it or manage it. So when the Soviet Union collapsed, they actually have to survive based on market forces. They actually have to be a profitable, productive business, which they know how to do. So I really want you to walk us through how you ended up buying that first business.
This very first venture was back in 1994. It was actually a neighbor of mine, the director of that factory. So once I met him and he said, you know what, we have to go bankrupt it. And I'm responsible for 100 people who work for me. And I feel this pressure my shoulders and I feel myself guilty, and I'm close to depression because we are literally one day before bankruptcy. But the way how it worked back then, the government allowed the organizations like this to privatize the equipment, but the old equipment was old. And I thought to myself, okay, you know, the universe gives me this opportunity. Somehow I found investors who were ready to invest in this project. And my mom said, she said, I don't believe how these serious people with money trust in you like you are 24 something I don't understand. I said, no, they don't trust in me. They trust in the project. And I was able to let them understand the, the business plan well enough. We purchased the real estate. So that factory consists of big manufacturing facilities. Then it was an office building. Then it was a cafeteria, which was facing inside to towards the manufacturing facility. So it was only people who work at the factory were able to use it. And also it has two stores in the center of Moscow, very good locations. And the stores were used to sell the product that they produce. And it was really run down. The print is old. Nobody buys what they do because, you know, it's new era. Western brands come to the market and everyone wants to buy something which makes sense, not the old school Soviet clothes. So what I did, we actually sold this office building. Then we renovated the cafeteria and made it a restaurant, opened it to the street, and then sold it as well for the money that we got from that. Completely renovated the entire machinery and everything, the manufacturing part and the stores. And also it was the time when western brands came to the market and I happened to be first to talk to them. And so this factory was first to manufacture Adidas in Russia. So it became really successful business. And then a few years, when, I guess in a year or two, when it was up and running operational and successful, I sold it to other investors.
