After Target Corp terminated a sourcing deal with Welspun India over cheap quality bed sheets being passed off as premium Egyptian cotton, Walmart Stores is reviewing Welspun’s cotton certification records. Besides the examination, Walmart plans to talk to the supplier and if any issues crops up, the retailer plans to handle it appropriately. Walmart happens to be Welspun's third-biggest customer, as per Bloomberg.
After Target Corp’s pull out, Welspun’s shares have been seen tumbling down 1ell to as low as Rs 65.85 in Mumbai trading on Tuesday. On Monday, the company said it's reviewing its supply chain and hiring a ‘Big Four’ accounting firm to examine its processes. After Monday's decline, the stock of Welspun has a market capitalization of $1.2 billion.
Welspun makes towels, sheets, rugs and carpets for 18 of the top 30 global retailers. Other major clients of Welspun include J.C. Penney Co. and Macy's Inc. Every fifth towel sold in the US is manufactured by Welspun India, according to the company. Welspun Group wants to become one of India's top 50 groups by market value by 2020.
