United States retailers, including Bed, Bath & Beyond and Walmart,have ordered investigations and external audits of products from Welspun India, following news that Target Corporation cancelled its contract with the towel maker, Reuters reported on Thursday. While a spokesperson for Bed Bath & Beyond, Leah Drill, said they will take action after a thorough inquiry, Walmart is in the process of reviewing Welspun’s cotton certification records.
The textile company’s market value saw a near 50% drop following Target’s accusation that it passed off standard cotton sheets as premium Egyptian ones for at least two years. It’s shares hit the daily lower limit for a traded stock for the fourth consecutive day on Thursday, leaving it with a market value of $798 million (approximately Rs 5,350 crore), nearly half of what it was a week ago, according to Reuters.
A Target spokesperson said the company was in the process of removing all products made by Welspun under its ‘Fieldcrest’ label from its catalogues. Meanwhile, Welspun has said it will hire an accounting firm to review its supply processes. “This is an issue of [the] highest priority for us,” the company said in a statement.
Touted as one of the biggest textile manufacturers in the world, Welspun India had, at one point, made products such as towels, carpets, bedsheets and rugs for 18 of the top 30 retailers in the world, including JC Penney and Macy’s Inc.
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