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Walmart Reviews Its Welspun Products After Target Severs Ties

If Welspun India falsified labels for its “Egyptian cotton” goods going to Target, what’s to say the same thing didn’t happen with Walmart?

That’s at least what the retailer has in mind as it is now investigating whether Welspun, one of the world’s largest textile manufacturers, pawned off cheaper cotton product but sold it as higher quality Egyptian cotton.

“We are currently reviewing Welspun cotton certification records and plan to have additional conversations with Welspun,” Walmart told The Wall Street Journal. “If we discover an issue, we will handle it appropriately.”

The move comes after Target said last week that it was cutting the cord on Welspun after finding 750,000 sheets and pillowcases were labeled as being made with Egyptian cotton but were in fact made from some other cotton of a lesser cost and quality.

Target—Welspun’s second largest customer after Bed Bath & Beyond—is in the process of terminating its relationship with the supplier, according to Bloomberg.

Welspun, which makes towels and other home textiles for retailers like Macy’s, J.C. Penney and Kohl’s, has so far been more or less mum on the matter apart from saying it has enlisted an accounting firm to review its supply chain based on Target’s allegations.

The company’s shares fell 20 percent for the second day straight Tuesday and trading was suspended as the plunge surpassed the daily limit.

With two major retailers hot on its heels, Welspun stands to face further investigation from more retailers.