Big US retailers open investigation against top Indian textile company for deception

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WASHINGTON, Aug 24 (APP): US top retailers have said they are opening investigation against one of Indias top textile companies, a week after a major retailer announced to cut ties with the company for selling cheap sheets as premium Egyptian cotton for two years.
The Indian company Welspun India sells products to almost all major US retailers including Wal-Mart, J.C. Penny Co., Bed Bath & Beyond and Target. Egyptian cotton is famous for its softness and durability.
Target last Friday said it was withdrawing thousands of items from its shelves after an investigation showed that the Indian company was selling cheap cotton sheets using non-Egyptian cotton for two years. Target also announced to cut ties with the company.
On Wednesday, other retailers Wal-Mart, J.C. Penny and Bed Bath announced that they were also launching investigation against Welspun for selling phony Egyptian cotton sheets, Wall Street Journal reported.
We will aggressively pursue our investigation and take appropriate action, if needed, the report said quoting Bed Bath & Beyond.
Welspun said it had hired an accounting firm to review its supply chain. The companys shares prices has taken a plunge since the revelation, falling to its maximum limit on Wednesday for a third-straight day, the report said. This has forced the stock exchange to suspend trading in its shares for touching down the maximum limit.
Two-third of its $898 million sales for the year that ended March 31 were from American retailers. The company also supplies towels for the Wimbledon tennis tournament and the Rugby World Cup.
The report quoting a Target spokeswoman said about 750,000 sets of sheets in stores between August 2014 and July 2016 under the Fieldcrest brand were labeled as made with Egyptian cotton. Target accused the Indian company for violating its policies.
Global retailers have complained of poor quality and weak compliance at factories in India and Bangladesh, the report said.