Target Corp. is refunding millions of dollars worth of sheets after finding a textile supply company was pawning off phony fabrics as luxurious Egyptian-cotton.
Approximately 750,000 sheets and pillowcases manufactured by Welspun India Ltd. were labeled to be 500-thread count Egyptian cotton, Bloomberg reports, but found to be a knockoff instead.
“After an extensive investigation, we recently confirmed that Welspun substituted another type of non-Egyptian cotton when producing these sheets between August 2014 and July 2016,” Target announced Friday.
The Minneapolis-based retailer has since pulled all Welspun products – sold under labels Fieldcrest and Crowning Touch – from its stores and website.
“Neither Target nor Fieldcrest had any knowledge of this substitution,” the company said in a statement. “These sheets were produced by a number of vendors and only one of those vendors was substituting product.”
Falsely labeled products were sold for as much as $175 per set, Business Insider reports, amounting in $90 million in potential refunds for Target.
Target has terminated its partnership with the Mumbai-based supplier, which responded by saying it was investigating the claims.
“We have initiated immediate actions to investigate the root cause. We are appointing an external auditor (one of the Big Four) to audit our supply systems and processes,” Welspun wrote in the release. “This is an issue of highest priority for us and we will take all necessary steps to address it.”
By Sunday, Welspun’s shares had fallen 20 percent, the most in a decade, according to Bloomberg.
Welspun managing director Rajesh Mandawewala maintained to Bloomberg Monday that the “error” was about “fiber provenance” and not about quality.
Customers who purchased the products during the timeframe can request a refund in the form of a gift card on Target’s web form here.