The Gildan logo is seen outside their offices in Montreal, Dec. 11, 2023.Christinne Muschi/The Canadian Press
The battle at Gildan Activewear Inc. GIL-T is moving to the boardroom, with a major shareholder saying it has signed up five potential new directors and intends to call a special meeting to reinstate Glenn Chamandy as chief executive officer, after Gildan sacked him earlier this month.
The shareholder, Los Angeles-based investment firm Browning West LP, said in a statement Friday that it now owns about five per cent of Gildan, the threshold for calling a shareholder meeting. Its five director nominees, if elected, would make up a minority of the 11-member board.
The list of potential directors includes Mr. Chamandy, a Gildan co-founder who served as CEO for 20 years until the company’s board dismissed him in early December. Browning West says its plans include removing board chairman Donald Berg and firing Vince Tyra, a former executive at underwear maker Fruit of the Loom, who is set to become Gildan CEO early in 2024.
Gildan said in a statement that its board “stands behind its considered decision to relieve Glenn Chamandy as CEO and to appoint Vince Tyra as the new CEO,” and that “the facts of this situation completely support the Gildan Activewear Board of Directors’ decision.”
Browning West said Mr. Tyra has “a track record of significant value destruction.”
Mr. Berg has said the board had a succession plan for Mr. Chamandy that he ultimately rejected. Another Gildan director, Luc Jobin, told The Globe and Mail that Mr. Chamandy had wanted to launch major acquisitions that gave the board pause.
A Dec. 20 statement signed by Mr. Berg and three other directors who chair board committees said that over the past two years the board’s “trust and confidence in Mr. Chamandy eroded gradually as we worked to hold him accountable for delivering the next chapter of the company’s long-term growth strategy as well as the development of his people.”
Mr. Chamandy told The Globe that prior to his dismissal he had no intention of leaving. He called the succession “a failed process.”
Gildan’s main business is manufacturing “imprintables” – blank T-shirts, sport shirts and fleeces used to make specialized apparel such as children’s softball team jerseys. It also sells clothing under the Gildan and American Apparel brands. Mr. Chamandy and his brother Greg founded the company in 1984, in a small shop in Montreal.
Browning West says that, including itself, there are nine shareholders, which together own 35 per cent of Gildan, backing the return of Mr. Chamandy. The others are Turtle Creek Asset Management, Jarislowsky Fraser Ltd., Cooke & Bieler LP, Pzena Investment Management LLC, Janus Henderson, Anson Funds Management LP/Anson Advisors Inc., Oakcliff Capital, and Cardinal Capital Management.
With 5 per cent of Gildan’s shares, Browning West would be the company’s fifth-largest shareholder, according to data compiled by S&P Global Market Intelligence.
“A critical mass of long-standing Gildan shareholders has clearly lost confidence in the current board due to its failure to carry out its most fundamental responsibility: selecting and retaining the best possible CEO,” Browning West said in its statement.
In addition to Mr. Chamandy, Browning West’s director nominees include Michael Kneeland, the former CEO of United Rentals, Inc.; Peter Lee, a co-founder and partner of Browning West; Karen Stuckey, a former senior vice-president at Walmart Inc.; and J.P. Towner, the chief financial officer at RONA Inc. and the former chief financial officer of Dollarama Inc. Mr. Kneeland would replace Mr. Berg as chair in the Browning West plan.
Gildan’s board had one fewer member – a total of 10, including Mr. Chamandy – until September, when it added Sharon Driscoll, a former top executive at RB Global Inc., formerly known as Ritchie Bros.
Gildan then added Christopher Shackelton, a co-founder and managing partner of of Gildan shareholder Coliseum Capital Management LLC, on Dec. 17, less than a week after Browning West and others criticized Mr. Chamandy’s dismissal. Coliseum is Gildan’s fourth-largest shareholder, with 5.8 per cent of the company, according to a Dec. 17 disclosure.