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Target has dumped one of India’s biggest textile companies because of fake bed sheets

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vgane

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Shame on Welspun! This news item is spreading like wild fire in social media! Looks very depressing to read! How can we cheat our clients? Forget exports, at this rate!

[h=1]Target has dumped one of India’s biggest textile companies because of fake bed sheets[/h]
target.jpg
No more spurious sheets. (Reuters/Peter Power)
[h=5]Share[/h]
[h=5]Written by[/h] Madhura Karnik
August 22, 2016 Quartz india

Target,America’s second-largest discount retailer, has decided to cut ties with Indian textiles manufacturer Welspun India because of fake Egyptian cotton sheets supplied by the Mumbai-headquartered company.
On Aug.19, the Minneapolis, Minnesota, retailer said that between 2014 and 2016, Welspun India supplied sheets saying they were made of Egyptian cotton, although they were not.
“After an extensive investigation, we recently confirmed that Welspun substituted another type of non-Egyptian cotton when producing these sheets between August 2014 and July 2016,” Target said in a statement. Target is contacting customers and offering a refund to those who bought these sheets, it said. The retailer has also removed the product—sold under the Fieldcrest label—from its stores.
“We have informed Welspun that, due to this conduct, we are in the process of terminating our relationship with them,” Target added. Some 750,000 such products were impacted over the two-year span, Molly Snyder, a Target spokesperson said in an email.
Welspun India is one of the world’s largest textile makers and typically caters to the US, UK and European markets. Target is Welspun India’s second largest customer, behind American retailer Bed, Bath and Beyond, Bloomberg reported. J. C. Penney, Macy’s, Costco, Home Depot and Walmart also buy from Welspun India.
The manufacturer also makes towels for the Wimbledon tennis tournament. Other products it makes include bath robes, bath rugs and mats, area rugs, carpets, bed sheets, utility bedding and fashion bedding.
Shares of Welspun India fell as much as 20% on the BSE Aug. 22, and hit the lower circuit. The company said in a statement (pdf) to stock exchanges that it has commissioned an audit.
“We have initiated immediate actions to investigate the root cause. We are appointing an external auditor (one of the Big Four) to audit our supply and processes,” said Welspun India, part of the $3 billion Welspun Group, adding the issue is of “highest priority.”
[h=2]Important customers[/h] The textile maker—and its shareholders—have reason to be worried because it has a huge exposure to the US market. “Every 5th towel sold in the US is manufactured by Welspun India,” according to its annual report (pdf). The company depends on exports for 95% of its revenue. It earned a total revenue of Rs4,961 crore for the 2015-16 financial year.
Future growth hinges on the US market where the company is targeting the hospitality sector, analysts have said. “Growth potential in the US hospitality and health care channels remains immense as Welspun sales from hospitality channel at $25-30 million (versus market size of $1.5 billion across both these segments). Welspun is in business development phase in its healthcare segment,” analysts Avi Mehta and Sameer Gupta of IIFL Institutional Equities, a brokerage, wrote in a July 27 research note.
Welspun India didn’t immediate reply to an email from Quartz inquiring on the specific business impact of Target’s decision.


http://qz.com/763188/target-has-dum...textile-companies-because-of-fake-bed-sheets/
 

prasad1

Gold Member
Gold Member
Shame on Welspun! This news item is spreading like wild fire in social media! Looks very depressing to read! How can we cheat our clients? Forget exports, at this rate!

It is sad, that Indian company is giving bad name to India. The stereotype of bad goods being substituted in India will persist for another decade.

Indian government should also punish Welspun.
 

tbs

Well-known member
hi

i know many USA stores are selling textile items mainly from india/pakistan/bangladesh/china....if we need export...the quality

and integrity are important....trustworthy is very important....we never learn from these mistakes...
 

prasad1

Gold Member
Gold Member
CHICAGO/NEW DELHI (Reuters) - U.S. retailer Bed Bath & Beyond on Wednesday said it ordered an external audit of textiles from Welspun India , after Target Corp last week accused the Indian manufacturer of passing off cheap sheets as premium Egyptian cotton for two years. This could compound the woes of Welspun, which supplies to several large U.S. retailers and has seen its shares plummet percent since Target's announcement on Friday. Bed Bath & Beyond spokeswoman Leah Drill said the retailer will pursue an investigation and take appropriate action.
 
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