A new year has brought a new chapter in the battle for control of Gildan Activewear (PPAI 250187, S13) – ranked the No. 38 supplier in the inaugural PPAI 100.

Despite one investment firm’s crusade to reinstate Gildan co-founder Glenn J. Chamandy as CEO, the board of directors counters that auld acquaintance should be forgotten and never brought to mind.

‘Disengaged’ Leader

On Monday, the board issued an open letter to shareholders in response to Browning West, a Los Angeles-based investment firm that wants to replace five directors from Gildan’s board with its own candidates, including Chamandy.

The board vowed to “set the record straight,” maintaining its position that retaining Chamandy as CEO would have “jeopardized the future of Gildan and destroyed shareholder value.”

Criticizing Chamandy for having “no credible long-term strategy and no vision for the future,” the board says it “gradually lost trust and confidence” in the co-founder. The board went on to accuse him of becoming “disengaged” as he focused on outside personal pursuits, including the development of a golf resort in Barbados.

“His management style was unstructured, with few senior leadership meetings, and he was rarely in the office, averaging just a few days a month even long after the end of the COVID shutdown,” the letter says. Chamandy also never visited the new Gildan manufacturing plant in Bangladesh and hadn’t traveled to the country in more than a decade, according to the letter.

“He tried forays into branded products, retail distribution, international expansion and yarn production, with mixed success, resulting in an eight-year annual revenue growth rate of less than one percent and write-offs and restructurings over that time period exceeding $450 million,” the letter says.

The letter also supported a board member’s previous claim that Chamandy gave the board an ultimatum to work toward a major acquisition or else he’d resign and sell his shares.

“Back in October, we reviewed our long-term strategic plan,” Luc Jobin, who has been a board member since 2020, told BNN Bloomberg. “We were confronted with an inorganic strategy which the CEO brought forward and entailed multibillion-dollar acquisitions outside of Gildan’s core of manufacturing. These acquisitions would have been highly dilutive to shareholders. They were very high risk. They needed a lot more work for the board to consider them seriously.”

The letter states that while the board had originally proposed a three-year transition plan whereby Chamandy would retire by December 31, 2024, “the ultimatums forced the board” to terminate him on December 10, 2023.

Demanding New Leadership

On December 29, Browning West, which owns about 5% of Gildan’s outstanding shares, issued an open letter to shareholders, announcing its plan to repopulate the board.  

If those candidates are elected, Browning West says, the newly reconstituted board would fire Vince Tyra – Chamandy’s successor and a veteran of both the apparel and financial industries – and reinstate Chamandy at the helm of the Montreal, Canada-based company.

  • Tyra becomes president and CEO effective February 12. In the interim, Craig A. Leavitt, a company director since 2018, is serving as acting president and CEO.

“Gildan’s board has demonstrated that it’s unwilling to act in the best interest of the company and its shareholders,” the letter states. “The incumbent directors’ actions have destroyed value for Gildan shareholders and introduced significant business risk, which we believe must be immediately addressed through a reconstitution of the board to prevent further damage to Gildan’s business and its stakeholders.”

“Shareholders should decide the future if they’re not happy with the CEO,” Chamandy, who claims he was “terminated without cause,” told Fashion Network. “The process was flawed, and they didn’t really have a very good plan.”

Tyra’s Background

Tyra is no stranger to the apparel industry.

Tyra also has deep financial industry experience, having been an operating partner at Southfield Capital, where he was a member of the Investment Committee.

  • Most recently, he served as senior vice president of corporate strategy and mergers and acquisitions at Houchens Industries.
  • He has also served as the University of Louisville’s vice president and director of intercollegiate athletics.

“The board is confident that Vince is the right person to lead the company into the next stage of its evolution and growth,” said Donald C. Berg, chairman of Gildan’s board of directors. “He has an extensive career as a global organization leader with experience as an apparel industry executive, an operator, an investor and transitioning founder-led companies. Vince’s diverse professional background will provide the necessary leadership skills to propel Gildan to even greater success.”