By
Bloomberg
Published
Dec 15, 2023
Two investment firms that are among the largest shareholders of clothing manufacturer Gildan Activewear Inc. are taking aim at the board for its decision to oust Chief Executive Officer Glenn Chamandy — a move that puts the company at risk, they say.
Los Angeles-based Browning West LP and Toronto-based Turtle Creek Asset Management Inc. issued letters to Gildan directors late Thursday, asking them to reappoint Chamandy. Together, the firms held more than 7% of the company’s shares as of the end of September, according to data compiled by Bloomberg.
“We urge the board to reverse this inexplicable, ill-conceived and value destructive decision,” Turtle Creek said.
Browning West attacked the appointment of Chamandy’s anointed successor, Vincent Tyra, a former executive at Fruit of the Loom. The investment firm said the board’s search process was flawed, that Tyra has a “track record of significant value destruction” and that he isn’t qualified to manage a large-scale operation like Gildan.
Gildan did not immediately respond to a request for comment.
Browning West called for the removal of the Chairman Donald Berg, and said it would consider requisitioning a shareholders’ meeting to replace the board. Its letter was reported first by the Wall Street Journal.
Shares of Gildan, a maker of T-shirts that owns the American Apparel brand, have fallen 11% since the company announced the management shuffle on the morning of Dec. 11. About two hours later, Chamandy issued a statement saying he’d been terminated “without cause” by the company he co-founded. The company has a market value of about C$7.6 billion ($5.7 billion).
RBC Capital Markets analyst Sabahat Khan said in a note to clients that the driver of the CEO change was “somewhat of a disagreement” about the timing of a succession planning.