With the formation of Yugoslavia as a state, Slovenia became its most industrialised region. No longer was it in an industrially subordinated position like before in the Austro-Hungarian Empire. Also, to Slovenian industry Yugoslavia represented a promising large market. Thanks to high customs protection, conditions had been established for Slovenia, incorporating 37 per cent of the entire textile production, to turn into the major textile centre in the country, particularly oriented into the cotton textile industry. The wool textile industry remained concentrated in Serbia. During the two decades before World War II, Maribor and Kranj became the major Yugoslav centres of textile industry. Over fifteen years, Maribor in particular turned into the major textile centre of the Kingdom of Yugoslavia. With twenty-one large textile factories around Slovenia in 1939, as many as fifteen were located in Maribor.

Nine major textile factories began operating in Slovenia between 1919 and 1923. Further seventeen were established by 1930, and another nine by 1936. Afterwards no new factories were inaugurated, which was partly due to the imminent war. In the 1920s, the weaving industry was on the rise in Slovenia, and in the 1930s the spinning industry was very prominent. However, spinning mills never managed to meet the demand of weaving factories. In turn, Slovenian textile factories were importing raw cotton from the USA and the UK as well as great amounts of cotton yarn from Italy, Czechoslovakia and Austria.

Before World War I, there was no textile industry in Maribor. The completion of the Fala hydroelectric power plant in 1918, the determination of the Maribor Municipality to connect the city to the electricity grid from the Fala plant by 1920, favourable prices of construction areas, good railway connections, sufficient cheap labour, as well as plenty of water were the factors that led to the surprisingly quick emergence and development of textile factories in Maribor.

Extremely high customs protection of the textile industry in Yugoslavia attracted foreign investments. The major share, 40 % of equity in the textile industry was of Czech origin, followed by 25 % of Austrian equity. The same share was contributed by Yugoslav owners. Swiss, British and Polish equity was also present with a few per cent share each. In the period between the two world wars, Maribor turned into a mighty centre of textile industry - Manchester of Yugoslavia.