MONTREAL — U.S. investment firm Browning West has requested a special meeting of Gildan Activewear Inc. shareholders to replace a majority of the company's directors and reinstate Glenn Chamandy as chief executive.
The firm, which owns a five per cent stake in Gildan, said Tuesday that it wants to replace eight of the company's 11 board members including chair Donald Berg, up from an earlier plan to replace five directors.
The firm said in a letter to shareholders that it expanded the slate because "new information has come to light in recent days indicating that the board is deeply entrenched and is entirely unresponsive to shareholder demands."
"The urgent need for even more substantial change became apparent once we learned that the Board unanimously: (i) will not consider the reinstatement of Glenn Chamandy as CEO, (ii) is committed to appointing Vincent Tyra to the CEO role, and (iii) is not willing to reconstitute the Board in a credible manner," Browning West wrote.
The push for change comes as shareholders, Chamandy and the company have been exchanging barbs since December, when Gildan announced his departure from the apparel firm he co-founded. The company simultaneously announced Tyra, a former Fruit of the Loom executive, would be Chamandy's replacement.
A handful of shareholders, including Gildan's largest shareholder Jarislowsky Fraser, have since sought a reversal of the decision.
But Gildan's board has held strong.
On Tuesday, the company acknowledged receipt of Browning West's request for a special meeting and promised to respond once it has reviewed the demand.
"The Board of Directors continues to view the efforts of Browning West and Mr. Chamandy as baseless, public misinformation tactics," Gildan spokesperson Genevieve Gosselin said in an email to The Canadian Press.
"As previously disclosed, the board is independently reviewing Mr. Chamandy’s engagement with certain shareholders prior to his termination."
The escalation in the fight over control of the company by Browning West comes after the Gildan board wrote a letter to shareholders in which it said Chamandy had no credible long-term strategy for the company and had lost the board's trust and confidence in his ability to grow an increasingly complex organization.
In response, Chamandy wrote his own letter in which he said he presented a comprehensive long-range plan in October that showed meaningful organic growth prospects for Gildan over the next five years.
Chamandy said Tuesday that "the board's unfortunate actions have resulted in a massive loss of shareholder value."
"This destructive course of action is counterproductive, and all efforts should be redirected at driving growth that benefits all company stakeholders, a priority which has traditionally been at the core of Gildan's values," he wrote in a press release.
Gildan, a Montreal-based business, was started by Chamandy's grandfather in 1946 under the name Harley Inc. In 1982, Glenn Chamandy and his brother took over and revitalized the brand.
This report by The Canadian Press was first published Jan. 9, 2024.
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