Welspun textiles being probed by Walmart, JCPenney over product integrity fears
Global retail majors Walmart and JCPenney are investigating textiles sourced from Welspun India for product integrity, while IKEA is awaiting the outcome of a probe by the Indian firm in the wake of lapses in its supplies to US-based Target.india Updated: Aug 24, 2016 22:49 IST
Global retail majors Walmart and JCPenney are investigating textiles sourced from Welspun India for product integrity, while IKEA is awaiting the outcome of a probe by the Indian firm in the wake of lapses in its supplies to US-based Target.
“JCPenney is conducting a thorough investigation of its Welspun textiles to ensure the integrity of its product claims,” a company spokesperson said in a statement.
It further said JCPenney suppliers of private and exclusive brand products are required to certify the quality compliance of any raw materials used and, when sourcing Egyptian cotton, manufacturers must provide a certificate issued by the Cotton Egyptian Association as an additional measure of authenticity.
On what actions could be taken, the spokesperson said: “It is too early in our review process to determine what actions may be necessary.”
A Walmart spokesperson said: “We are currently reviewing Welspun cotton certification records and plan to have additional conversations with Welspun. If we discover an issue, we will handle it appropriately.”
A spokesperson of the Swedish furniture retailer IKEA on the other hand said: “To our knowledge and according to our continuous verifying processes, the supplier delivers according to our agreements.”
The spokesperson further said: “However, we will follow their ongoing investigation carefully and await the outcome. Until then our business collaboration continues as usual.”
IKEA does not buy products made from Egyptian cotton. From the end of fiscal 2015, IKEA reached the goal of 100 per cent cotton from more sustainable sources and Egypt does not have sustainable cotton programs related to Cotton from more sustainable sources, the statement added.
Welspun, which was supplying bedsheets and pillowcases made of Egyptian cotton to Target, was alleged by the US-based retailer for substituting another type of non-Egyptian cotton when producing sheets supplied between August 2014 and July 2016.
Target has since then decided to terminate its contract with Welspun after an investigation.
Welspun on its part has said it has initiated immediate actions to investigate the root cause and was appointing an external auditor to audit its supply systems and processes.
Target had said that as soon as its investigation confirmed the substitution, it pulled all remaining product from Target stores and Target.com.
“We have informed Welspun that, due to this conduct, we are in the process of terminating our relationship with them,” Target Corp said.
Shares of Welspun India tanked 9.95 per cent on BSE, closing the day at Rs 59.30.