In 1802, James Coats (1774-1857), a weaver from Paisley, Scotland, established the business that would become J & P Coats Ltd, thread manufacturers. Entering into partnership with fellow manufacturer James Whyte, together they virtually cornered the market in Canton Crape. In 1826 Coats began producing his own thread. In 1830, the management of the manufacturing department and the thread business were passed to Coats’ partners and his sons, the firm becoming known as J & P Coats. The company expanded rapidly during the 1830s, both at home and overseas.

In 1883, the firm became a private joint stock company of family shareholders and in 1890 the business was floated as a public company. In 1896, J & P Coats amalgamated with Clark & Co of Paisley and its American associates, as well as with Brook of Meltham and Chadwick of Eagley Mills, Bolton, England, to form the enlarged firm of J & P Coats Ltd, headquartered in Glasgow.

The company continued to expand throughout the first half of the 20th century by acquiring controlling interests in several other textile companies. By 1912 it was one of the largest listed companies in the world.

Following the takeover of Patons & Baldwins Ltd in 1960, the company became known as J & P Coats, Paton & Baldwin Ltd. In 1965, they acquired a controlling interest in the Pasolds group, which included Ladybird children's wear, Donbros knitwear, and Chilprufe garments. In 1967, they acquired Dynacast Precision Engineering and Jaeger fashions, and the company became known as Coats Patons Ltd.

Coats Viyella was formed in 1986 after the acquisition of Coats Paton by Vantona Viyella (Previously Carrington Viyella and Viyella International Ltd). The company was a textiles business with over 40 factories and at one point was one of the largest in the UK.

In 1987 Coats Viyella acquired Youghal Carpets of Co. Cork. Tootal Group plc was acquired by the company in 1991 and in 1995 the company acquired Bace Manufacturing. In 1999 the company sold its engineering business, Dynacast, which made zip fasteners and plastic components for razors and for cars, to Cinven, leaving the valuation of the rest of the group at virtually nothing. From this Coats Viyella took over its rival Hicking Pentecost, which owned Barbour Threads.

In 2000 Coats Viyella withdrew from the clothing industry. Viyella is now a fashion brand for clothes and home furnishings. In 2001 the company changed its name to Coats Plc. It was acquired by the Guinness Peat Group in 2003, the company was delisted, and its manufacturing base moved East. The company launched new products and services, including a colour sampling service, and entered the fibre optics market.

In 2015 Coats Group re-entered the London Stock Exchange. The acquisition of services firm GSD followed. 2016 saw the company acquire software company Fast React Systems and Gotex, a manufacturer of high-performance materials. Expansion continued in 2017, as Coats acquired Patrick Yarn Mills, an American manufacturer of high-performance engineered yarns.