The founder of the Gavrilov-Yam flax manufactory was Alexey Vasilyevich Lokalev. After the abolition of serfdom in 1861, he purchased a plot of land measuring 10 desyatins and 1100 square sazhen near the village of Gavrilov-Yam and opened a small hand-weaving factory and bleaching production. Here, the fabric made at the factory and obtained from home weavers was bleached. The weaving production required a lot of yarn, and in the spring of 1871, Lokalev began the construction of a mechanical flax spinning mill. His eldest son Alexander was actively involved in this. The design and supply of equipment from England were handled by Ludwig Knop's firm. Production was launched on February 17, 1872, less than nine months after the start of construction. The Gavrilov-Yam Lokalev manufactory quickly became one of the largest textile manufactories in Russia.

After the death of Alexey Vasilyevich, the factory was inherited by his son Alexander Alekseevich. In 1874, a weaving production was built, in 1875 the spinning mill was expanded, and in 1879 a new weaving building was added, which tripled production. By 1881, the factory employed 8,768 spinning spindles, 340 mechanical looms, and about 2,500 workers.

In 1896, at the exhibition in Nizhny Novgorod, the Lokalev firm received the right to depict the state coat of arms on its products and became a supplier to the Imperial Court. After the 1917 revolution, the enterprise was renamed the 'Zarya Sotsializma' combine. Today, the site of the Gavrilov-Yam manufactory is home to the 'Lokalev' technopark.