Gildan Activewear investor Browning West now wants to wipe out most of the Montreal company’s board and install eight hand-picked executives who could further its plan to restore Glenn Chamandy to the CEO role he held for 20 years before his December ouster shocked industry watchers.
After Gildan’s board attempted to the set the record straight on Monday, Browning West doubled down Tuesday in the weeks-long fight over the American Apparel owner‘s future roadmap.
Browning West, which owns a 5 percent stake in Hanesbrands’ chief competitor, wants to hold a special meeting “without delay.” At this meeting shareholders can vote on the Los Angeles investor’s eight board nominees. This is an increase over the five-director slate it originally assembled and would effectively tilt the balance of power on the 11-member board.
Related Stories
Browning West and other independent shareholders control 35 percent of Gildan’s outstanding shares. These shareholders include Turtle Creek Asset Management Inc., Anson Funds Management LP, Oakcliff Capital, Jarislowsky Fraser Ltd, Cooke & Bieler LP, Pzena Investment Management Inc. and Janus Henderson.
Browning said it had no choice but to pick additional nominees because new developments suggest that Gildan’s current board “is far more entrenched than we had previously imagined.” It made this accusation based on recent interactions with board as well as the board’s public statements.
Browning West cofounders Usman S. Nabi and Peter M. Lee are concerned that the Gildan board would delay its annual shareholders meeting and any special meetings to as late as Fall 2024, and “deploy baseless litigation tactics against its own shareholders.” The activist investor is worried that the Gildan board might try to push up the date when Vince Tyra, Chamandy’s replacement, is scheduled to start.
Tyra, who worked at Fruit of the Loom in the late 1990s, was announced as Gildan’s next president and CEO Dec. 11, effective Feb. 12. The news ignited the public feud between Gildan and its more vocal shareholders, with Chamandy’s surprise ouster spurring several activist investors to call for his reinstatement.
Each side in the power play has spun its own tale of woes. Gildan’s board insists that the problem with Chanamdy centers on his vision, or lack thereof, for the company, and not the “false narrative” he’s trying to peddle about succession planning. According to Browning West the Gildan board is trying to “divert focus from substantive issues while imposing significant costs and hurdles on concerned shareholders” instead of protecting shareholder value.
“We are not deterred by such tactics and will continue to exert our rights and hold the Board accountable for its failures,” Browning West said.
The investment firm wants to remove board chair Donald Berg and seven incumbent directors: Maryse Bertrand, Marc Caira, Shirley Cunningham, Charles Herington, Luc Jobin, Craig Leavitt, and Chris Shackelton.
Browning West’s director picks include Glenn Chamandy, Michener Chandlee, Ghislain Houle, Mélanie Kau, Peter Lee, Karen Stuckey, J.P. Towner, and Michael Kneeland, who would also be independent, non-executive chair. Kneeland retired as CEO from United Rentals Inc., and is its current non-executive chair.
“Gildan Activewear Inc. acknowledges receipt of Browning West’s Requisition of a Special Meeting of Shareholders and will respond once it has been reviewed,” a Gildan spokeswoman said.
