Rebel Gildan executives push for return of ex-CEO Chamandy

MONTREAL – Some executives of clothing maker Gildan Activewear are urging investors to support an activist shareholder that is trying to win control of the board and reinstate fired chief executive Glenn Chamandy.

The executives have written a letter, addressed to Gildan shareholders, saying that it is “critical” to bring back Mr Chamandy – who ran the company for decades before he was ousted in late 2023 – and end a long power struggle.

Investors will vote to choose a board on May 28. 

“The ongoing proxy battle will determine the future leadership of our company, and we firmly believe that reinstating Glenn as CEO is vital for Gildan’s success,” the letter says.

Four of the executives behind the letter, all of whom are at the vice-president level or higher, spoke with Bloomberg on condition they not be identified because they believe they would risk losing their jobs for speaking out publicly. 

Gildan has a stock market value of US$6 billion (S$8.09 billion). The Montreal-based company is among the world’s largest makers of cheap casual apparel, providing inexpensive clothing to retailers such as Walmart and blank T-shirts to print wear shops and designers.

It also owns the American Apparel brand, which it bought out of a bankruptcy proceeding. 

Gildan’s board stunned investors on Dec 11, 2023, by announcing that Mr Chamandy had left and would be replaced by Mr Vince Tyra, a former Fruit of the Loom executive and former athletic director at the University of Louisville. The shares fell 11 per cent that day. 

The CEO change triggered a contest for control of the board, with Los Angeles-based investment firm Browning West launching a formal campaign to replace most of the directors. 

Browning, which owns about 5 per cent of the shares, has gained the backing of other large shareholders, and it scored another victory this week when proxy adviser Institutional Shareholder Services advised Gildan investors to vote for Browning’s entire slate of nominees. They include United Rentals chair Michael Kneeland and seven others, including Mr Chamandy. 

The executives’ letter does not take issue with anything Mr Tyra has done in his four months as CEO.

But the executives suggest directors misled the public when they claimed that Mr Chamandy had been an absentee leader. Their letter praises his dedication and detailed grasp of Gildan’s operations, which include about 30 production facilities globally.

“His deep understanding of Gildan’s processes and operations is unparalleled,” their letter states. “Claims of absenteeism are misleading. Glenn has always been engaged with the executive team and committed to driving our company’s success.”

Mr Scott Davidson, an outside spokesman for Gildan, said the company became aware of the letter after an employee contacted its internal ethics hotline about it.

“As we approach the shareholder voting deadline, Gildan wants employees to vote their shares at their discretion and not feel pressured to take a public position in this contest,” he said by e-mail. “The e-mail behind this letter, urging employees to take a position, is an example of recent behaviours during this proxy contest.”

The board has explained Mr Chamandy’s firing by saying there were serious disagreements about succession and strategy.

Mr Chamandy wanted to pursue a multibillion-dollar acquisition strategy and gave the board an ultimatum over the issue, the company has said. The board said the proposed acquisitions were too risky. BLOOMBERG