The shift by Mouzakis, from dominance in the Greek sewing thread market to a debate over a possible halt to production reflects the difficulties facing the country’s textile industry for years.
The company founded by Eleftherios Mouzakis in 1944, with its famous “Butterfly Threads”, grew into one of Greece’s most important industrial companies in the sector. It was established at an exceptionally difficult time for the country and provided jobs for people struggling to survive. Eight decades later, however, its production future is under review.
Discussion at the extraordinary general meeting on 29 October revealed two different approaches. Major shareholder Eleftherios-Ion-Eric Mouzakis-Gagnum raised the possibility of halting textile production, while the company’s chairman and chief executive, John-Paul Gagnum, argued that restructuring efforts needed more time.
Losses predated the energy crisis
The current situation is not the result of a recent turn of events. According to figures presented at an earlier general meeting, production has been loss-making continuously since at least 2016, with cumulative losses exceeding €12.4 million by May 2026.
This suggests that the existing production model faced structural weaknesses long before energy prices soared.
One of the biggest problems is the age of the machinery and equipment. Facilities that once provided a technological edge now require substantial investment to modernise, with no guarantee that it will pay off in a market marked by intense competition and narrow profit margins.
The company’s difficult position is also reflected in its 2025 financial results. Although the group reported net profit of €1.59 million, its textile division posted operating losses of €2.22 million, with property rentals its main source of profit.
Competition and energy costs
Mouzakis’s difficulties are linked to the broader decline in the competitiveness of Greece’s textile industry.
The relocation of much of global production to countries with lower labour costs, combined with weaker European demand, has limited domestic companies’ ability to maintain their production scale.
The energy crisis added to these pressures. The Association of Greek Textile Industrialists has repeatedly warned that energy costs can account for as much as 50% of production costs, while also highlighting difficulties in accessing finance and investment programmes.
For Mouzakis, the rise in natural gas costs proved particularly burdensome. According to management, in 2022 the company used up around €1 million of its available funds to meet its needs, reinforcing the need to cut production.
Scaling back and seeking a way forward
Management’s response is to gradually reshape the textile business into a smaller, more flexible operation.
Production has already been significantly reduced, while the workforce has fallen to around 45-50 employees, according to remarks made at the August general meeting.
At the same time, the company is seeking more opportunities to source products from partners in China, India, Egypt and Turkey, while considering outsourcing production work.
The aim is to maintain its commercial presence and serve customers without having to bear the current cost of producing in Greece.
The extraordinary general meeting on 29 October also highlighted efforts to limit credit extended to customers, speed up collections and sell off stock that is no longer needed.
Management believes these measures can make the textile business viable and buy it time.
That time, however, is not unlimited. A review of the issue within six months will show whether there is scope to keep the business going or whether Mouzakis will have to move even further away from the production model on which its history was built.