Gildan board stands by ousting CEO, says he ‘jeopardized’ shares

‘HIGH-RISK’ DEALS

The board of Gildan Activewear Inc. is digging in for a fight against major shareholders who are pressing the clothing manufacturer to bring back fired chief executive Glenn Chamandy.

Gildan directors publicly attacked Chamandy’s track record and strategies in a letter released Monday, saying they are unanimous in their belief that keeping the longtime executive “would have jeopardized the future of Gildan and destroyed shareholder value.”

The Canadian company, which owns the American Apparel brand, is the subject of an unusual, and increasingly bitter, feud between the board and several large investors over who should run the company. Gildan announced Chamandy’s departure on Dec. 11.

Los Angeles-based investment firm Browning West LP said last month it plans to force a shareholder meeting to elect new directors and install United Rentals chair Michael Kneeland as chair. The effort to overhaul the board and reinstate Chamandy also has the support of Jarislowsky Fraser Ltd. and Turtle Creek Asset Management Inc.

Those three firms together own about 15 per cent of Gildan’s shares, according to their statements and public filings.

In Monday’s letter, the Gildan board reiterated earlier statements that Chamandy

forced a showdown over a proposed multibillion-dollar acquisition strategy. “The board was dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal,” it said, without naming the proposed acquisition targets.

The board also accused him of being a distracted CEO and said he was rarely in the office, even after the end of COVID shutdowns.

“Mr. Chamandy was chief executive for 20 years, and, in his last few years he gradually became more disengaged as CEO as he increasingly focused on outside personal pursuits including the development of a golf resort in Barbados,” the directors said.

“We would have preferred to keep many of these details private, but the public misinformation tactics by Mr. Chamandy and Browning West demand a public response.”

Chamandy and Browning West did not immediately reply to a request for comment.

Gildan shares were little changed shortly after 10 a.m. Monday. The Montreal-based company’s market capitalization is $7.2 billion, down by more than $1 billion since Chamandy was sacked.

The board named a former Fruit of the Loom executive, Vince Tyra, as the next CEO. Browning West and other holders have been scornful of that appointment, questioning Tyra’s track record.