Bed Bath & Beyond have become the latest retailer to question Indian manufacturer Welspun after ordering an external audit of textile materials from the company. The U.S retailer accused the textile manufacturer of selling cheap sheets as premium quality Egyptian cotton for the last two years.
This may compound the woes of the Indian manufacturer which supplies materials to a number of large U.S. retailers. The company has already seen its shares drop by 43%.
The issue highlights the problems that large retailers face when it comes to compliance and quality control when purchasing from suppliers around the globe. It also negatively affects the Indian Prime Minister’s efforts to spur global enterprises to boost manufacturing in India.
Bed Bath & Beyond spokesperson Leah Drill said that the retailer will conduct an investigation and take proper action.
The issue with Bed Bath & Beyond comes after Wal-Mart the world’s largest retailer said it is conducting a review of the Indian manufacturer’s cotton certification records.
Department store JC Penney has also initiated an investigation to verify the integrity of the company’s product claims. Macy’s said it is still monitoring the situation.
Target said it has started a process that will see all products made by Welspun removed from its retail outlets and website. Particularly the products that were sold between the year 2014 and 2016 that Welspun claimed were manufactured from Egyptian Cotton.
The investigation conducted by Target, which audits its products routinely, finished at the close of July.
Target has offered a refund to its affected customers which will come in form of a gift card to those who have either purchased the products online or have a loyalty card.
Target declined to give any comment on how this product quality problem was missed by their buying team for a long period.