Italian-owned Valy plans to shut down its production facility in Valjevo, putting 737 jobs at risk as weaker European demand, lower sales in Russia and rising labour and energy costs prompt its parent group, Golden Lady, to consolidate Serbian manufacturing in Loznica.
The company intends to transfer production to its Loznica factory, ending approximately 25 years of manufacturing in Valjevo. Management has said the restructuring is designed to preserve the group’s industrial presence in Serbia rather than withdraw from the country.
Golden Lady shifts production to Loznica
Valy, part of the Italian Golden Lady group, has operated in Valjevo since 2001, employing a workforce predominantly composed of women.
The company said the Loznica facility offers greater production capacity and more comprehensive infrastructure. Consolidating operations is expected to reduce duplication between sites, improve capacity utilisation and create a more efficient manufacturing structure.
Golden Lady identified declining hosiery consumption in key European markets, a substantial fall in Russian sales and rising labour and energy costs as the main reasons behind the decision. These pressures have reduced factory utilisation and made the operation of two separate production sites economically unsustainable. The group has not disclosed the expected savings, the capacity available to absorb Valjevo employees or the separate financial performance of the two factories.
Manufacturing employment declines across Serbia
The restructuring comes amid wider pressure on Serbia’s industrial workforce. According to the Statistical Office of the Republic of Serbia, manufacturing employment fell by 18,178 year-on-year in the third quarter of 2026, or approximately 3.7%.
The manufacture of wearing apparel lost 3,752 jobs, while textile manufacturing recorded a decline of 563 workers. Some other manufacturing segments, including motor vehicles, reported employment growth.
Serbia’s industrial production nevertheless increased 5.1% year-on-year in September. Higher output does not necessarily lead to greater employment, as factories can increase production through productivity improvements, automation and more intensive use of existing capacity. Valy’s planned closure highlights the exposure of labour-intensive manufacturers to international price competition, weaker consumer demand and rising operating costs.
Unions seek transfers and employment protection
The potential loss of 737 jobs would have significant consequences for employees and the Valjevo economy. The Sloga trade union said many workers are women over the age of 50, while approximately 20 married couples are employed at the factory.
Sloga called on the company to offer voluntary transfers to Loznica and cover transportation costs for employees who accept. It also requested intervention by the Serbian government, relevant ministries and the City of Valjevo. The Nezavisnost union separately sought transfers to Loznica, employment opportunities with other Valjevo companies and compliance with labour legislation and collective agreements. It rejected Sloga’s criticism of its handling of the closure, saying it had already taken steps to protect employees.
Management has reportedly said it will fulfil contractual employment obligations, including severance entitlements, and cooperate with local institutions to mitigate the consequences of the restructuring. The final number of workers who may be transferred, retained or dismissed has not been established.
Rising costs challenge Serbia’s manufacturing model
Golden Lady’s decision illustrates the changing economics of Serbia’s export-oriented manufacturing sector. Companies that initially invested in the country partly because of competitive production costs must now respond to higher wages, energy expenses and international competition.
Manufacturers can offset some cost pressures through energy-efficient equipment, improved production planning and modernisation, but these investments require capital and sufficient demand to justify the expenditure.
For Serbia, retaining foreign manufacturing investment increasingly depends on productivity, infrastructure, skilled labour and the ability to develop higher-value production. The Valy restructuring represents a loss of industrial activity in Valjevo, but does not amount to Golden Lady’s complete withdrawal from Serbia, as the group plans to continue production in Loznica.
