objects bounds center is far away from actual position

I have a prefab (a hanging tapestry, skinned mesh + cloth) which looks fine when I open it ias a prefab in editor, and the bounds white box shows in correct position.

However when I add an instance to the scene, the bounds appear very far away, with "center" x value of 80, for instance, but all three coordinates are off. I have tried to edit bounds but it doesn't seem to work for me.

This causes the instance to be away from the camera frustum when it shouldn't, so it appears and disappears from view. Any idea of why could this happen, and how to fix it?