Last month, U.S. retailer Target Corp severed ties with Welspun after accusing them of passing off cheap sheets as premium Egyptian cotton for two years, according to Reuters.
"Welspun has not been able to assure us the products are 100 percent Egyptian cotton, which is unacceptable," Wal-Mart said in a statement. The company will pull the products from its stores and website.
Wal-Mart said it will not cut ties with Welspun but will work with them to implement strong controls and better label the products. The retailer will offer customers, who purchased the products, a full refund.
Egyptian cotton is prized because the length of the cotton fibers are longer, resulting in a finer, lighter more durable fabric and longer-lasting, higher-end clothing.