Global markets were roiled by rumors that retailer Wal-Mart is planning to cut orders with suppliers over the next two quarters in order to remedy its excess inventories. Immediately following a report by Bloomberg, Wal-Mart shares dropped 1.5% and the world’s major indices followed suit. The S&P 500 fell 0.3%, the S&P/ASX 200 dipped 0.2% and China’s Shanghai Composite also went down 1%.
Speaking to Reuters, a Wal-Mart representative disavowed the rumors, calling them “completely inaccurate.”
Global exporter Li & Fung defended Wal-Mart as well: “There has been no cancellation of orders from Wal-Mart and we continue to do business with them as usual. Also, Wal-Mart is continuing to place orders for 2014 as a normal,” said a spokesperson from Li & Fung, speaking to Reuters.
Li & Fung has endured its own financial setbacks recently, reporting a steep 70 percent decrease in net profit for the first half of 2013. The largest supplier of goods to retailers worldwide, the company’s stock has taken a beating, dropping as low as HK$11.20, its lowest level in the last month.