On Friday, Target announced that it was severing ties with Welspun India, one of India’s largest suppliers of textiles. The decision came after an investigation in which Target concluded that more than 750,000 Egyptian cotton sheets and pillowcases were actually made from lower-quality cotton.
Target said it was already reaching out to its customers and issuing refunds.
The company issued the following statement on its website:
One of Target’s vendors, Welspun Global Brands (Welspun), was one of the producers of Egyptian Cotton 500-thread count sheets under the Fieldcrest label for Target. 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. Neither Target nor Fieldcrest had any knowledge of this substitution. These sheets were produced by a number of vendors and only one of those vendors was substituting product. This was a clear violation of both Target’s Code of Conduct and our Standards of Vendor Engagement, and was contrary to the high ethical standards to which we hold ourselves, and our vendors.
As soon as our investigation confirmed the substitution, we pulled all remaining product from Target stores and Target.com. On August 19, 2016, we began reaching out to all REDcard and Target.com guests who purchased the sheets between August 2014 and July 2016 and offered them a full refund. We are reassuring our guests that this is not an issue of safety and there is no risk in continuing to use this product. Any guests who purchased the products from Target during that timeframe may submit this web form to request a refund in the form of a gift card.
We have informed Welspun that, due to this conduct, we are in the process of terminating our relationship with them.
We value the trust that our guests place in us. The Target team will continue to work closely with all vendors to help ensure that the products we offer to our guests meet or exceed their expectations.
For Target, the move is another meant to boost consumer trust and help declining sales.
The retailer also recently responded to backlash over its public bathroom policy. Its solution—which will cost Target $20 million—is to add a third bathroom to its stores, which will contain a single toilet and can be locked by any customer who wants additional privacy (including those uncomfortable with sharing a bathroom with transgender customers and those shopping with a child of the opposite sex).
"We put that in motion for some time prior to the [June] shareholders meeting," said spokeswoman Katie Boylan. "At the end of the day, Target is all about inclusion. We want everyone to feel comfortable in our stores."
There are about 1,800 U.S. Target stores, and all but 300 already have the single occupancy bathrooms available. All but about 25 of those stores should have the new bathrooms by the end of the year, and the remaining stores should get them early in 2017, Boylan said.
As for Welspun, the company is in damage-control mode as its shares plummet.
On Monday, Welspun shares dropped 20 percent (the daily limit) before its trading was halted. Fortune reported that at 5:18 GMT, the Mumbai market “was trading down 0.47 [percent].”
Welspun’s managing director told investors that it was taking steps to address the issue, Bloomberg reported:
The company said it will review its supply chain and expects an audit to be completed within six to eight weeks. “There has been a failure on our part, without an ambiguity,” said Welspun managing director Rajesh Mandawewala on a conference call Monday. “The error is on our side so we have to take responsibility for it.”
On Saturday, Welspun issued a statement that read, in part:
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. This is an issue of highest priority for us and we will take all necessary steps to address it.
We have an impeccable record of supplying quality products to our customers globally for over two decades. We reiterate our commitment to the highest standards of customer service and compliance.
The Wall Street Journal reported that Welspun’s problems might not stop with Target:
The case underscores the challenges of monitoring a global supply chain. Large retailers often rely on a vast network of suppliers in developing countries to manufacture the goods they sell.
Welspun began as a small silk mill in India in 1985 and quickly blossomed into one of Asia’s largest textile makers, supplying bed spreads, rugs and pillow covers to some of the biggest names in retail, including Wal-Mart Stores Inc., Bed Bath & Beyond Inc., J.C. Penney Co. and Macy’s Inc.
The Wall Street Journal also reported:
American retailers accounted for two-thirds of Welspun’s $878 million in sales in the year ended March 31, according to Mumbai-based brokerage Edelweiss Securities. Edelweiss said Target accounted for about 10% of Welspun’s sales.
(Image via)
from PR Daily News Feed http://ift.tt/2bfDezU
No comments:
Post a Comment