The board of directors for Top 40 supplier Gildan (asi/56842) released a statement Monday, Jan. 8, saying it fired company co-founder/CEO Glenn Chamandy from the chief executive position because his leadership had become ineffective, disengaged and risky, asserting that he lacked the “ideas and vision” to lead the multibillion-dollar business into the future.

The directors reaffirmed their decision to replace Chamandy with Vince Tyra, a former Fruit of the Loom and Broder Bros. executive, stating that Tyra has a “proven track record (that) involves developing and implementing pragmatic strategies that have enabled the organizations he led to grow.”

The board’s statement was the latest salvo in what’s turned into a bitter, highly public dispute over the future leadership of Gildan, a Montreal-headquartered publicly traded manufacturer of apparel basics whose T-shirts and other wearables sell in the promotional products industry and other channels.

Certain top Gildan shareholders have revolted against the board’s decision to oust Chamandy. Los Angeles-based firm Browning West, in particular, is calling on fellow shareholders to appoint five new board directors, terminate Tyra (whose tenure formally begins Feb. 12), and reappoint Chamandy – both as CEO and a board director.

Key Gildan investors that include Turtle Creek Asset Management, Jarislowsky Fraser Ltd. and Oakcliff Capital reportedly plan to vote in favor of Browning West’s plan at an upcoming shareholders meeting.

“We cannot recall a situation where shareholder objection to a board’s decision was so wide and so swift,” Turtle Creek said in a Jan. 4 statement. “We believe that Gildan’s shareholders have lost confidence in the existing board.”

‘Misinformation Tactics’

In the face of such pressure, Gildan’s board issued a statement to stockholders that offered more in-depth details on Chamandy’s departure and why they believe Tyra is the right executive for the job.

Accusing Chamandy and Browning West of “public misinformation tactics” following the former CEO’s dismissal, the board said Chamandy had to go because the board had lost trust and confidence in him as he struggled to grow Gildan organically in recent years.

The board accused Chamandy of being distracted by his private efforts to build a golf resort in Barbados. The directors said Chamandy never visited an important new Gildan factory in Bangladesh, only came to the office a few days a month even after COVID-19 shutdowns ended and rarely held senior leadership meetings.

Investor Wants To Oust Gildan Board Members, Return Chamandy to CEO https://t.co/l7EESTz7iN

— Chris Ruvo (@ChrisR_ASI) January 2, 2024

“It had become clear that he had no credible long-term strategy and no vision for the future,” the board said. “Mr. Chamandy jumped from one opportunistic strategy to another. He tried forays into branded products, retail distribution, international expansion and yarn production, with mixed success, resulting in an eight-year annual revenue growth rate of less than 1% and write-offs and restructurings over that time period exceeding $450 million.”

Directors said that in Dec. 2021, the board and Chamandy agreed to a three-year CEO succession plan that would see him exit the chief executive role at the end of 2024.

But instead of sticking to the plan, the board said Chamandy “attempted to entrench himself as CEO by giving the board an ultimatum (in autumn 2023): Approve a high-risk multibillion-dollar acquisitions strategy predicated on guaranteeing his role as CEO for several more years to oversee its integration and his eventual succession. If not, he would leave the company immediately and sell his shares. The board was left with no other choice but to remove him as CEO.”

As the acrimony over Chamandy’s future intensified, the board said he recorded a private phone call in November with Gildan Board Chairman Donald C. Berg without Berg’s knowledge. Chamandy also allegedly violated policies on the safeguarding of corporate information. “The board is currently investigating these and other matters, including Mr. Chamandy’s engagement with certain shareholders prior to his termination,” the directors said.

Chamandy has said he was forced out by the board unfairly – in part, because they didn’t agree with his vision for the future of Gildan. Following the board’s Monday letter to shareholders, Chamandy responded on Tuesday, criticizing the directors.

“The board’s self-serving motives, designed to distract from its own recklessness, have led them to lose sight of what is truly important — the best interests of the company,” Chamandy said in a statement.

Browning West wants directors replaced immediately and Chamandy returned on the double. “With each passing day, the current state of uncertainty is risking permanent damage to Gildan stakeholders,” the firm said.

Board: Tyra Will Be ‘Part of the Solution’

In calling for Chamandy’s return, Browning West and other investors have criticized Tyra, saying he lacks the necessary experience to lead a vertically integrated global manufacturer like Gildan and that he has a history of “value destruction.”

The Gildan board called Browning West’s characterization of Tyra false and an attack. It asserted that when Fruit of the Loom faced challenges in 1999, Tyra, then president of its activewear division, and a colleague formulated a plan to restructure the company. Tyra ultimately helped implement the plan, thereby laying the foundation for a successful sale of the company to Berkshire Hathaway.

Vince Tyra, incoming CEO of Gildan, officially begins as CEO on Feb. 12.

Tyra also formerly served as CEO of supplier Broder Bros., which has evolved into Top 40 supplier alphabroder (asi/34063). Under his more than five years of leadership, Broder Bros. tripled revenue, according to Gildan.

In addition to other roles, including a three-year stint as director of intercollegiate athletics at the University of Louisville, Tyra was most recently senior vice president of corporate strategy and mergers and acquisitions at Houchens Industries, a $4 billion revenue employee-owned holding company.

“Mr. Tyra’s diverse professional background across apparel, private equity and NCAA college sports reflects a consistent theme of effective leadership,” Gildan’s directors said. “The board is resolute in its belief that he will be part of the solution at Gildan as well.”

Based on estimated 2022 North American promotional product revenue of $762.2 million, Gildan ranked fifth on Counselor’s most recent list of the largest suppliers in the industry.

Across all its business channels, including promo and others, Gildan tallied record total revenue of $3.24 billion in 2022. Through the first nine months of 2023, the company’s sales were down 4.3% compared to the prior year. Full-year results for 2023 are due out in the first quarter of 2024.

*This article was updated Wednesday, Jan. 10, 2024 to reflect Chamandy’s Tuesday-issued response to the board.