Two of Gildan Activewear’s shareholders are calling on the company to reinstate Glenn Chamandy as CEO.
The firms, Turtle Creek Asset Management and Browning West, LP, are asking Gildan’s board of directors to reinstate Chamandy, Gildan’s co-founder who was CEO for approximately 20 years before being ousted on Monday. In his own statement, Chamandy said his termination was without cause.
In its letter, Turtle Creek said the termination of Chamandy exposes the company to a loss of leadership and institutional knowledge, and potentially threatens customer relationships. The investment firm, which has been a decade-long shareholder in Gildan and owns approximately 3.2% of its stock, called the move a “grievous error.”
“Turtle Creek believes that succession planning is an important duty of the Board and should be conducted through a thoughtful and deliberate process, including through the engagement of the Company’s existing leadership and its shareholders,” the firm said in its letter. “In contrast, the Board’s abrupt termination of Mr. Chamandy, appears to have been conducted in great haste, without meaningful shareholder engagement, and without considering the substantial adverse impact on Gildan’s business.”
Browning West, which owns about 3.9% of Gildan’s outstanding common shares, took its call to reinstate Chamandy a step further, demanding the board remove Donald Berg as chair of the board. The firm said that its own co-founder, Peter Lee, should be named to the board as a representative of a significant, long-term shareholder, to bring financial acumen and expertise to Gildan and to “prevent permanent damage at Gildan.”
It similarly questioned the experience of Vince Tyra, who Gildan named Chamandy’s successor.
Tyra, who is set to step into the role on Feb. 12, 2024,worked in the apparel business before as an executive for Fruit of the Loom and Broder Brothers, now Alphabroder. He currently serves as senior vice president of corporate strategy and mergers and acquisitions for Kentucky-based Houchens Industries, which has holdings in the construction, manufacturing, retail, healthcare and insurance spaces.
Browning West said that Tyra had “limited manufacturing experience and a record of value destruction.” It additionally said Gildan’s leadership transition could trigger attrition among the company’s other senior executives.
Tyra’s former employer, Fruit of the Loom, competes with Gildan on retail and printwear. In its letter, Browning underscored that Fruit of the Loom “has struggled for decades and lost tremendous market share to Gildan under Mr. Chamandy’s leadership.” The firm said during Tyra’s tenure as president of retail and activewear at Fruit of the Loom from 1997 to 2000, its activewear operating profit swung from $75 million to a loss of over $30 million and the company’s share price declined by 99%, per the letter. Fruit of the Loom filed for Chapter 11 bankruptcy in 1999.
“Finally, while there is never a good time to replace an engaged and value-creating CEO with one who has a history of value destruction, it is even more of a head-scratching decision to do so in a challenging economic environment, which has adversely impacted the industry in recent quarters,” the letter stated.
Browning said that if the board doesn’t act with urgency, it will consider requisitioning a special meeting to reconstitute the board.
A Gildan spokesperson did not immediately respond to Fashion Dive’s request for comment.
Gildan reported $870 million in net sales in its most recent quarterly results, a 2% increase from that period in the prior year. Its activewear sales totaled $744 million, with sales in its hosiery and underwear category totaled $126 million.
Gildan manufactures activewear, underwear and socks and works with wholesale distributors, screen printers and embellishers. In addition to owning the Gildan brand, it owns American Apparel, Comfort Colors, Goldtoe and Peds. It holds a licensing agreement for Under Armour socks in the U.S. and Canada.
