Target offering refunds for some Egyptian cotton sheets

The second largest discount retailer in the United States-behind Walmart-was unaware that the Mumbai-based company was supplying bed sheets made from fake Egyptian cotton under the Fieldcrest label for Target for almost two years, beginning in August of 2014.

“JCPenney is conducting a thorough investigation of its Welspun textiles to ensure the integrity of its product claims”.

It’s too early to determine what actions the retailer might take, she wrote.

Target Corp, Welspun India’s biggest customer after Bed Bath and Beyond, accounts for 10 per cent of the company’s revenues.

Cotton grown and sourced from Egypt is believed to be softer and more durable than other varieties and is sold by companies seeking to charge a premium on home-furnishing products. “We reiterate our commitment to the highest standards of customer service and compliance”, the company said.

Walmart told The Wall Street Journal that it is “reviewing” Welspun India’s certification records. “Welspun does produce some of Macy’s private brand products, but they are not 100% Egyptian cotton”.

“We are taking this situation very seriously.We won’t rest until this situation is resolved”, Welspun said Wednesday. “Until then our business collaboration continues as usual”.

“Export is a big business for Welspun so the implications of this could be huge”.

Kumar, in his note, said Welspun executives were vague on facts during the call, which threw up more questions than answers. U.S. customers account for two-third’/s of its business.

Welspun India said in a release to the BSE on Saturday that it was investigating a product specification issue with one client program, without specifically naming Target Corp. Elara has downgraded to “sell” its rating on the stock.

Mumbai: Welspun India’s share price plunged 20% on Tuesday, leading to an over 35% fall in the stock since its Friday close even as the company sought to calm investors rattled by United States retailer Target’s decision to cancel orders over a raw material dispute.