Dive Brief:

• Target, which severed ties last week with Welspun and sparked a flurry of questions over the Indian textile vendor's labeling practices, is considering shifting its cotton sheets and towels business to another Indian textiles supplier — Trident Ltd. — Bloomberg reports.

• “There is a good chance that Trident may step into Welspun’s shoes,” Arun Kejriwal, a director at Kejriwal Research & Investment Pvt. in Mumbai, told Bloomberg. “This is even more so as new capacity set up by Trident is yet to be fully utilized. They are currently operating under 50%. They can ramp up quickly.” But Target declined to confirm the report: A Target spokesperson told Bloomberg "We have previously shared that we were actively working with existing vendors on our matrix to determine where we move the business. Trident is one of our current vendors. It would be premature to speculate on how we will plan for, and distribute our business."

• Wal-Mart is another retailer that says it's investigating the authenticity of Egyptian cotton home goods from Welspun. But the Wall Street Journal reports that an employee said the retailer questioned the vendor’s cotton labeling as far back as 2008. Neither Wal-Mart nor Welspun would confirm or deny the report, according to the Journal.

Dive Insight:

The Wall Street Journal reported that Wal-Mart, the world’s largest retailer, had questioned Welspun about the labeling and authenticity of its Egyptian cotton sheets, but it has yet to uncover any indication of where such questioning led. Wal-Mart and Welspun have kept their lips sealed.

Last week Welspun — faced with a down-spiral in its share price after Target cut ties with the vendor — admitted to snafus in its sourcing information and took responsibility for what it said was the result of its "increasingly complex" supply chain.

If it becomes clear that such issues were present nearly a decade ago, however, Welspun may have to uncover (or reveal) whether it did have knowledge that sheets it purported to be of the higher thread-count cotton were in fact of lesser (or at least different) quality.

Egyptian cotton is prized for its high quality, and any dilution of the term is a threat to brands. It’s a problem similar to counterfeiting issues faced by Alibaba’s Chinese marketplaces as well as Amazon, eBay, Etsy and other marketplaces that feature a number of goods sourced from sellers and manufacturers around the globe.

Punjab-based Trident likely has the capacity to meet Target’s needs quickly as it makes the switchover, experts told Bloomberg. Welspun did some $90 million of its business with Target. Trident shares jumped on Friday to hit their highest mark since November.