Two large shareholders of Gildan Activewear have called on the company’s board of directors to reinstate Glenn Chamandy immediately as the company’s CEO to restore stakeholder confidence.
Turtle Creek Asset Management and Browning West, which own roughly 3.2% and 3.9% respectively of Gildan’s stock, both wrote to the Canadian apparel company’s board after it announced on December 11 that it had appointed Vince Tyra to replace Chamandy from February 12, 2024, with Craig Leavitt, a director, acting as interim president and CEO until then. The news sent Gildan’s shares 11% lower on the day.
Gildan gave no reason for Chamandy's departure, but noted that “over the span of his 40-year career, Glenn has been a forerunner in our industry, taking Gildan from a small family-owned business to a leading apparel company with over US$3 billion in revenues.”
In response, Chamandy stated: “Yesterday, I received notice from the chairman of Gildan Activewear's board of directors that the company was terminating my employment agreement without cause.
“It is unfortunate that my vision of the path forward has differed from that of other board members. This comes after 40 years of service in the impressively successful company founded by my family,” he added.
Turtle Creek noted that Gildan, one of Canada’s “great success stories,” has outcompeted and outlasted many other players in a challenging and competitive industry.
“This success is due in large part to the vision and leadership of its founder and long-time CEO, Glenn Chamandy,” the fund manager said.
“Shareholders who were astute enough to purchase shares at the time of Gildan’s IPO in 1998 have been handsomely rewarded– Gildan’s share price has seen a 90-fold increase over the last 25 years."
In its statement, Browning West said: “We believe that under Mr Chamandy’s leadership, Gildan’s share price was poised to be worth US$60 to US$80 over the next two years, which represents an approximately 80% to 140% increase from the current price, which assumes that Mr Chamandy delivers $4 of earnings per share and the stock re-rates to its historical valuation range.”