Wal-Mart pulls out Welspun's Egyptian cotton sheets from its stores

Retail giant Wal-Mart Stores Inc. has announced recently its decision to remove Egyptian cotton sheets manufactured by Welspun India form its shelves after investigations confirmed that the Mumbai-based textile company could not guarantee the authenticity of the products.

Welspun could not give Wal-Mart assurance that the sheets were made of 100 percent Egyptian cotton and the retail chain deemed the situation as unacceptable.

Wal-Mart, the biggest retail chain in the world, said that it will pull out Welspun products from its stores in the US and online platform Walmart.com. The company will offer customers who already purchased the sheets a full refund. The textiles removed from the retailer's shelves will be donated to charity.

Last month, another retail giant, Target Corp. took off Welspun's Egyptian cotton sheets from its outlets and severed ties with the company after finding out that it has not been using authentic Egyptian cotton for the products in the past two years.

A Welspun spokesperson said that the company acknowledges Wal-Mart's actions and is currently working with the retailers to resolve the issue. It has also hired an accounting firm to investigate the cause of the problem and taken steps to better monitor its supply chain.

About two-thirds of Welspun's revenue comes from US retailers. Since the Egyptian cotton issue flared up last month, the company's shares have lost 45 percent of their value.