Wal-Mart Stores has decided to stop selling Egyptian cotton sheets made by Welspun India , after its investigation found the Indian textile giant couldn’t guarantee that its products were legitimate. Wal-Mart arrived at the decision as Welspun was not able to assure them that the products were 100 per cent Egyptian cotton. Wal-Mart spokeswoman Marilee McInnis said that it was unacceptable.
Wal-Mart, the world’s biggest retailer is taking off Welspun products from its shelves in the US and Walmart.com. The company said that it would offer customers who purchased the products a full refund. It will donate the sheets currently on shelves. The move is the latest blow to the Indian textile company after Target Corp said it was pulling thousands of Welspun’s “Egyptian cotton” sheets from its shelves last month and cutting ties with the company after it found Welspun had not used actual Egyptian cotton in the products for about two years.
A spokesman for Welspun acknowledged the Wal-Mart action and said the company is working with retailers to resolve the issue. The company has hired an accounting firm to investigate the cause of the problems and said it is installing a technology to better monitor its supply chain. Two-thirds of Welspun’s sales come from US retailers. Since the Egyptian-cotton issue flared up last month, shares of Welspun have lost 45 per cent of their value.
