Stating that it is aware of the allegations that some of the Welspun's bedding products, labeled as Egyptian cotton, are not actually manufactured with Egyptian cotton, Bed Bath & Beyond said it "Welspun has reaffirmed to us that the Welspun product carried in our stores is Egyptian cotton".
"To further assure ourselves and our customers, we have engaged an independent third party to perform an audit of the supply chain to confirm this information," a company spokesperson said in an e-mailed statement.
Earlier in the day, Welspun India Managing Director Rajesh Mandawewala told analysts in a conference call that the firm is in the process of appointing an external independent 'Big Four Auditor', to audit all of its supply systems and processes to understand the root cause.
"The audit will give us clarity on a number of questions, including where and how the issue occurred and what steps we will need to take to tighten our processes," he said, adding the audit was likely to be completed in six to eight weeks.
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Welspun, which was supplying bedsheets and pillowcases made of Egyptian cotton to Target, was alleged by the US-based retailer for substituting another type of non-Egyptian cotton when producing sheets supplied between August 2014 and July 2016.
Target has since decided to terminate its contract with Welspun after an investigation.
Welspun on its part has said it has initiated immediate actions to investigate the root cause and was appointing an external auditor to audit its supply systems and processes.
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