The textile industry in Spain is mainly composed of small and medium enterprises which significantly limit the investment capacity of the sector. The family nature of most companies in Spain’s Catalonia region, the lack of entrepreneurial vision and poor motivation are the reasons for the slow growth in the sector.

Since the small and medium-sized textile companies cannot implement new strategies, there is a decline in operating margins of the whole sector. Lack of funding opportunities and shortage of specialized personnel are also reasons that are affecting modernization in the Spanish textile sector. This scenario has led to shutdown of many companies that have failed to adapt to changing market situations. 

One major threat faced by the Spanish textile sector is the relocation of production activity to emerging countries, particularly in Asia. Restrictions on textile imports were removed during the liberalization of trade in 2005, which established Chinese leadership in the textile world. 

The traditional commercial structure and the difficulty of access to new distribution channels has led to a high degree of fragmentation in the Spanish textile sector and resulted in lack of cooperation between enterprises.