Egyptian cotton sheets might not be what you think they are

Egyptian cotton is widely seen as the most premium option on the market when it comes to bedsheets. But, there is good reason to believe that some - if not most - of the Egyptian cotton sold in the US is fake.

Retailers including Walmart, J.C. Penny, and Bed Bath & Beyond are investigating one of the biggest suppliers of Egyptian cotton in the world, following reports that their products were fake.

Target recently announced it would be refunding more than $90 million to customers, after selling fake "Egyptian cotton" sheets for two years. Supplier Welspun substituted another type of non-Egyptian cotton when producing the sheets between August 2014 and July 2016, the company said.

Egyptian cotton is considered some of the highest-quality cotton in the world, because Egypt is known for growing a type of cotton with especially long fibers. Longer fibers result in a softer and more durable final product, making Egyptian cotton the perfect choice for luxury bedding

Similarly high-quality cotton can be grown in other parts of the world. However, cotton must be grown in Egypt in order to be considered real Egyptian cotton.

That creates some problems. Less than 1% of all cotton produced in the world last year can be traced to Egypt, according to the US Department of Agriculture. Plus, Egypt's cotton production has been shrinking, impacted by economic and political upheaval, reports the Wall Street Journal.

Target's refund is the biggest and most public indication that something is afoot in the Egyptian cotton industry. However, there is reason to believe that Egyptian cotton knockoffs may be a problem that stretches far beyond Target's bedsheet business.

"When you think about it, 1% of the world's crops are Egyptian cotton. You walk into any store, or look at any one of these websites and see they're all selling Egyptian cotton - it just doesn't add up," Scott Tannen, founder of luxury bedding startup Boll and Branch, told Business Insider. "I think [the Target case is] just at the tip of the iceberg."

Tannen has reason to be skeptical of the Egyptian cotton industry. When he founded Boll and Branch, he says he struggled to find Egyptian cotton suppliers who could trace their supply chains to Egypt. Now, selling cotton sourced from India through a supply chain the company built from the ground up, Boll and Branch needs to clear the hurdle of convincing customers that "100% organic" cotton is just as good as "Egyptian cotton" when it comes to luxury bedding.

While Tannen has an invested interest in exposing fake Egyptian cotton, he isn't the only one suspicious of the industry. Earlier this year, the Cotton Egypt Association found that 90% of "Egyptian cotton" sold by retailers tested using a DNA-based authentication program did not contain any cotton produced in Egypt. The association at the time held up Welspun as a symbol of success - something that has clearly since been called into question.

If Welspun, one of the few Egyptian cotton suppliers that the Cotton Egypt Association has actually certified, can't be trusted, how can consumers know that they aren't being duped when buying bedsheets?

Few retailers are willing to disclose who actually makes the bedsheets that they sell. Target told Business Insider that the company typically does not disclose which vendors make which products, and a customer service representative at Overstock.com, another major seller of Egyptian cotton bedsheets, said that as an "online retailer," the company doesn't "have the information regarding the supplier."

Companies including Walmart, J.C. Penny, and Bed Bath & Beyond who previously worked with Welspun are now launching investigations of their own into the sourcing of their Egyptian-cotton products.

Egyptian cotton has become synonymous with premium cotton in the US. Now that retailers are investigating their supply chain, however, it may be harder for retailers to sell bedding as "Egyptian cotton" without providing customers with proof.