Dive Brief:
- Gildan Activewear released a statement Tuesday defending its decision to fire Glenn Chamandy following weeks of shareholder pressure to reinstate the cofounder and former CEO.
- Gildan said it discovered new information about an “undisclosed relationship” between Chamandy and a shareholder, one that is “now calling for his reinstatement.” Gildan said it obtained information about the relationship via Chamandy’s files and electronic information. In his own statement, Chamandy said the Gildan board’s strategy was to “[undermine] my reputation and my record through insinuation and distortion of the truth.”
- Gildan’s new CEO and president Vince Tyra stepped into the role on Monday, a month earlier than his anticipated start date. At the time of the announcement, Chamandy said his termination was without cause.
Dive Insight:
Some of Gildan’s largest shareholders, including Jarislowsky Fraser Ltd. and Browning West, called on Gildan to reinstate Chamandy and dismiss the chairman of Gildan’s board due to the decision in the weeks following Chamandy’s departure. On Dec. 29, 2023, Browning West announced its intention to call a special shareholders meeting to reinstate Chamandy and replace five of the board’s directors.
In Gildan’s statement, it said Chamandy had a close relationship with hedge fund Browning West.
“He was invited to be one of the guest speakers at the hedge fund’s February 2023 Investor Day, and while Browning West has been invested in Gildan for years, Mr. Chamandy appears to have treated Browning West differently than other Gildan shareholders,” the statement reads.
Gildan said Chamandy “became more disengaged as CEO as he was increasingly distracted by outside personal pursuits including the development of a luxury golf resort in Barbados.” Gildan’s statement also makes statements about Chamandy’s calendar and the amount of emails he sent.
However, Chamandy said Gildan’s statement about him “continues to reflect an approach that is misguided, misleading, and value-destructive, prioritizing the obsession of board members with their own reputations above all else.”
“It is imperative that the board refocus its efforts and priorities toward recovering the loss of value for which it is responsible — and listening to shareholders, a goal that benefits all stakeholders,” Chamandy said. “This must be done forthwith to avoid further detriment to Gildan.”
David Swartz, senior equity analyst for Morningstar Research Services, said there doesn’t seem to be a way to end the fight between the board and its activist shareholders.
“None of this is inspiring confidence in the company,” Swartz said in an email to Fashion Dive. “Meanwhile, we’ve heard practically nothing from the new CEO. Whether this fight has any major impact on Gildan’s business is hard to say, but it can’t be positive.”
