Gildan: Vitriol Between Board and Shareholders Becoming Absurd, but No Impact on Our Valuation

On Dec. 11 (see our note of this date), no-moat Gildan announced that longtime CEO Glenn Chamandy was out and was to be replaced by Vince Tyra, a former executive at Fruit of the Loom and a wholesale imprintables company. Soon after, several institutional shareholders publicly derided Tyra’s qualifications and demanded Chamandy’s reinstatement as CEO. In the ensuing weeks, Gildan’s board has traded statements with these shareholders and Chamandy in which both sides have accused the other of wrongdoing. The loudest of the dissident shareholders is Los Angeles-based Browning West, which is now demanding a special meeting to replace Gildan’s existing board with eight of its nominees, including Chamandy. Meanwhile, Gildan’s board has dug in, moving up Tyra’s first day as CEO by a month (to Jan. 16) and, among other things, accusing Chamandy of colluding with Browning West prior to his firing. In its most recent attack, Gildan’s board claims that Browning West violated the Hart-Scott-Rodino Antitrust Improvements Act by not notifying the relevant government agencies before acquiring 5% of the firm. Unsurprisingly, Browning West dismissed this accusation as a tactic by Gildan’s board to prevent a proxy fight that it will lose.