By
Bloomberg
Published
Jan 13, 2024
Clothing maker Gildan Activewear Inc. is under pressure from shareholders to reverse its appointment of a new chief executive officer. The board isn’t budging.
The company that owns the American Apparel brand says Vince Tyra will take over as CEO on Monday, instead of the previously-announced date of Feb. 12. It’s the latest tactical move by directors in an ongoing war with investors over who should run the Montreal-based manufacturer of T-shirts and apparel with 51,000 employees worldwide.
Several of Gildan’s largest holders don’t want Tyra. Browning West LP, which owns about a 5% stake in Gildan, has criticized the former Fruit of the Loom executive’s record, saying he has “weak credentials.” The investment firm is waging a campaign to replace most of the board and reinstate longtime CEO Glenn Chamandy, who was sacked in early December.
Browning West is supported by other shareholders that collectively own more than 20%, including Jarislowsky Fraser, Janus Henderson, Cooke & Bieler, Anson Funds, Oakcliff Capital, Cardinal Capital and Turtle Creek Asset Management.
Tyra is starting the job earlier “to engage early with key stakeholders and bring needed stability and leadership to the company,” Gildan said in a statement Friday. Chair Donald Berg again defended the selection process which led to the hiring of Tyra.
“When the board began the external phase of the CEO search back in May of 2023, we knew that scaling the company in an increasingly complex and competitive environment demanded a hands-on CEO with fresh ideas, deep apparel experience,” he said.
Gildan said Tyra had helped restructure Fruit of the Loom before it was sold to Berkshire Hathaway Inc. in a deal announced in 2001. In its latest role, Tyra was senior vice-president of corporate strategy, mergers & acquisitions at Houchens Industries Inc., an employee-owned conglomerate that owns retail, construction and other businesses.
“It is clear to us – and presumably our fellow shareholders – that Gildan’s board is trying to use Vince Tyra’s accelerated start date to defy shareholders who have clearly rejected Mr. Tyra and to shift attention away from our requestioned special meeting,” Browning West said in an emailed statement.
Browning West has proposed a slate of directors that includes United Rentals Inc. Chair Michael Kneeland and former executives from Nike Inc. and Walmart Inc.
Stifel Financial analyst Martin Landry said in report this week that Gildan’s board has “limited options” but to agree to Browning’s request for a shareholder meeting.
“This saga is unfortunately not beneficial to any stakeholders and the allegations unveiled publicly by the board and by the former CEO may leave scars that could take a long time to heal,” he wrote.