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Walmart stops selling Welspun India's Egyptian cotton products

US-based retail chain Bed Bath & Beyond and JCPenny are also conducting third party audit of items sourced from Welspun India, following lapses in supplies by the Gujarat-based firm to the US-based Target.

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Photo: Welspun website
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Global retail giant Walmart has stopped selling Welspun India's Egyptian cotton products, a fortnight after another US retail giant Target Corporation terminated contract with the Gujarat-based textiles maker over alleged lapses in its products supply.

"Welspun has not been able to assure us the products are 100 per cent Egyptian cotton, which is unacceptable. While the sheets are excellent quality, we are offering our customers a full refund," Walmart Spokesperson said in a statement.

It further said: "Walmart is working with Welspun to implement strong controls and better label the products they supply to us."

Welspun India, which has appointed consultancy firm Ernst & Young to look into the alleged lapses, however said in a BSE filing: "Welspun and Walmart will continue to do business together. Welspun in working to implement stronger control and better label the products we supply."

The company further said: "The product line in question with Walmart accounts for approximately 1.5 per cent of Welspun's business."

The Egyptian cotton product portfolio which has come under scanner accounts for 6 per cent of its annual business, it added. The company had posted a total net sales of Rs 5,387.66 crore in the 2015-16.

US-based retail chain Bed Bath & Beyond and JCPenny are also conducting third party audit of items sourced from Welspun India, following lapses in supplies by the Gujarat-based firm to the US-based Target.

Last month, Target Corporation after an extensive investigation, confirmed that Welspun substituted another type of on-Egyptian cotton when producing Bed sheets and pillows between August 2014 and July 2016.

The retailer had said as soon as its investigation confirmed the substitution, it pulled all remaining product from Target stores and Target.com.

Sales to Target Corp was approximately USD 90 million in 2015-16 for Welspun India and accounted for almost 10 per cent of its overall business.

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