The Frayed Reputation Of Egyptian Cotton
The scandal that has devastated the business and reputation of Welspun India Ltd., India’s largest maker of home goods like sheets and towels, may also end up wrecking the prestige of Egyptian cotton. On Aug. 19, Target Corp. said that 750,000 Welspun sheets that were supposedly premium-priced Egyptian cotton were made of some other material. Target dropped Welspun as a supplier, immediately depriving the company of about $90 million in annual sales, or around 10 percent of its total revenue. Other Welspun customers, including Wal-Mart Stores Inc., Bed Bath & Beyond Inc. and J.C. Penney Co. are now investigating. Welspun admits it’s at fault. “There has been a failure on our part, without an ambiguity,” Managing Director Rajesh Mandawewala said in a conference call. “The error is on our side so we have to take responsibility for it.” But he declared that the problem was “fiber provenance,” not cotton quality. He’s right. Legally, “Egyptian cotton” means exactly what it says. Not better, not softer, not stronger. Just grown in Egypt. Read more at Bloomberg.
