Home / Companies / News /  Welspun India product claims: Now, Bed Bath & Beyond starts review

Mumbai: American retailer Bed Bath & Beyond Inc. also one of Welspun India Ltd’s largest customers said late on Wednesday evening it will independently review its supply chain following Target Corp.’s decision to snap ties with the Indian textile maker.

Bed Bath & Beyond is the fourth retailer following Target, Wal-Mart Stores Inc and J.C. Penney Co. now reviewing its supply chain to verify Welspun’s product claims.

Meanwhile, the Welspun stock has recovered a little bit, after 1% stake of the company changed hands in four block deals.

However, buyers and sellers were unknown, according to a Bloomberg report.

On Thursday, the stock was trading at 53.4—a level last seen on 17 June 2015, down 10% from its previous close of 59.30 at 9.55am.

The company has so far lost over 4,968.37 crore in market capitalisation in the last four days of trading.

ALSO READ | How long does it take to discover Welspun India’s new worth?

“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. We will aggressively pursue our investigation and take appropriate action, if needed, until this matter is resolved to the satisfaction of Bed Bath & Beyond and its customers," said Leah Drill, senior associate, public relations, Bed Bath & Beyond in an email to Mint.

Sales from the US account for two-thirds of Welspun’s sales. “If the other companies also start investigating the quality of supplies from Welspun and find issues with it, then could be a cascading impact on revenues," Sumant Kumar, an analyst at Elara Securities (India) Pvt. Ltd had told Mint on Tuesday.

Welspun has appointed an external auditor (one of the big four) to audit its supply systems and processes. “This is an issue of highest priority to us and we will take necessary steps to address it," Welspun said in a statement to the BSE.

Also Read: Welspun India gets tangled in knots

Rajesh R. Mandawewala, managing director at Welspun India, told analysts on Monday that the company had been selling the same material to a “few other customers" as well.

“We are actively engaged with our customers. Most of them have been supportive," he said, sharing that the product made up 3-6% of its overall sales.

Mandewewala said the firm was in talks with audit firms to restore the robustness of its supply process and the audit should be completed in six-eight weeks.

Textiles and garments exports from India is a $42 billion industry accounting for 5% of global trade, according to research from retail consultancy form Wazir Advisors.

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