Gildan Activewear‘s board warned that ex-CEO Glenn Chamandy is wielding a “false narrative” to get investor Browning West to lobby for his reinstatement, weeks after his surprise ouster touched off fierce fight over the Hanesbrands rival’s future and leadership.
On Monday, the Canadian basics giant issued a new statement claiming the Los Angeles investor’s “misguided” campaign to recall the co-founder ignores Chamandy’s “ineffective leadership, lack of vision and high-risk go-forward strategy.”
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Chamandy, according to the Gildan board’s latest shareholder letter, is trying to make his termination about succession planning when the real issue is the T-shirt and sweatpants maker’s future direction.
“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,” the letter reads, outlining previously undisclosed details of the high-profile power play underway.
Chamandy spent weeks spreading an inaccurate, misleading story about recent company events, according to the Gildan board, writing that “well-intentioned investors have bought into that false story.”
Though Chamandy was the right leader during his two-decade career as CEO, it’s now “clear that he is out of ideas and vision to take Gildan into the future,” the board wrote.
The board said Chamandy recently struggled to scale “an increasingly complex organization,” and without a cohesive long-term roadmap, he “jumped from one opportunistic strategy to another.” Forays into branded products, retail distribution, international expansion and yarn production yielded mixed results. That led to an eight-year annual revenue growth rate of less than 1 percent, with write-offs and restructuring lapping $450 million during that time, according to the board.
Gildan’s board also details Chamandy’s gradual disengagement as CEO, from “outside personal pursuits” like redeveloping a golf resort in Barbados to convening fewer senior leadership meetings. What’s more, he never visited Gildan’s new manufacturing plant in Bangladesh, according to the board, nor has he traveled to the country, a key manufacturing hub, in more than a decade.
Speaking to the three-year succession plan, the letter claims Chamandy’s plan for “risky and highly dilutive multi-billion-dollar acquisitions” would require him to stay on longer than originally planned so he could oversee the integration. New information also suggests Chamandy couldn’t answer the most basic questions about his proposed plan.
“The Board asked Mr. Chamandy to provide a thorough analysis on his plan, including risks and mitigation,” the letter states, adding that Chamandy said he would leave Gildan if the board didn’t agree to his plan. He was scheduled to retire on Dec. 31, 2024, according to their agreement, but Gildan responded to his ultimatum by firing him last month.
The board accused Chamandy of engaging in questionable behavior like recording a private, confidential phone call without the chairman’s knowledge, and violating company policies about protecting corporate information. “The Board of Directors is currently investigating these and other matters, including Mr. Chamandy’s engagement with certain shareholders prior to his termination,” according to the letter.
The board also took issue with Browning West’s claims that Fruit of the Loom ran into financial challenges when Vince Tyra, its new CEO pick, was running the show. Rather, the Fruit of the Loom board embraced Tyra’s plan, and he worked with the new CEO to implement the new strategies. “Those steps laid the foundation needed to stability the company and contributed to its eventual sale to Berkshire Hathaway,” the Gildan board wrote.
According to the Gildan, Chamandy put his own interests ahead of the company and “orchestrated his departure to maximize disruption.”
