The fight for control of multibillion-dollar Top 40 supplier Gildan (asi/56842) is intensifying.

Browning West, a Los Angeles-headquartered investment firm, is spearheading a charge to reinstate Gildan co-founder Glenn Chamandy as CEO and to oust five directors from the company’s board, replacing them with new directors.

Glenn Chamandy co-founded Gildan in the mid-1980s with his brother and was the company’s CEO for about 20 years before being fired in December.

Chamandy would be among the five new board members under Browning West’s plan, which also calls for terminating Vince Tyra, the former Broder Bros. (now alphabroder [asi/34063]) and Fruit of the Loom (asi/84257) executive the current board hired in December to replace Chamandy. Tyra’s tenure officially begins Feb. 12.

Browning West owns about 5% of publicly traded Gildan’s outstanding shares. That gives the firm the leverage to requisition a special meeting of Gildan shareholders in which investors could decide whether or not to support the proposed board overhaul and Chamandy’s return.

“Gildan’s board has demonstrated it is unwilling to act in the best interest of the company and its shareholders,” Browning West said in a letter to shareholders. “The incumbent directors’ actions have destroyed value for Gildan shareholders and introduced significant business risk, which we believe must be immediately addressed through a reconstitution of the board to prevent further damage to Gildan’s business and its stakeholders.”

According to Browning West, nine investors that collectively own about 35% of Gildan shares want Chamandy returned to the C-Suite and the board. Those other investors are Turtle Creek Asset Management, Jarislowsky Fraser Ltd., Cooke & Bieler LP, Pzena Investment Management LLC, Janus Henderson, Anson Funds Management LP/Anson Advisors Inc., Oakcliff Capital, and Cardinal Capital Management.

Turtle Creek Asset Management Inc., an investment management firm and a Gildan shareholder for about a decade, stated publicly that it supports Browning West's plan. "We believe that Gildan’s shareholders have lost confidence in the existing board," Turtle Creek said. "A swift resolution of this situation is imperative in order to arrest any further value destruction."

Gildan Board Slams Chamandy, Seeks To Assuage Investors as CEO Firing Fallout Persists https://t.co/T5L5wXYGPZ

— Chris Ruvo (@ChrisR_ASI) December 20, 2023

Donald C. Berg, chair of the Gildan board, is among the directors that Browning West wants to send packing. Beyond Chamandy, the investment firm is aiming to appoint the following executives to the board: Michael Kneeland, chair and former CEO of United Rentals Inc; Peter Lee, co-founder and partner of Browning West; Karen Stuckey, former senior vice president at Walmart Inc.; and J.P. Towner, former chief financial officer of Dollarama Inc. and current CFO of RONA Inc.

While Browning West has criticized Tyra as having “a track record of significant value destruction,” Gildan has said in a statement that it “stands behind its considered decision to relieve Glenn Chamandy as CEO and to appoint Vince Tyra as the new CEO.”

“Vince’s diverse professional background will provide the necessary leadership skills to propel Gildan to even greater success,” Berg has said.

Gildan announced Chamandy’s departure and Tyra’s hiring on Dec. 11. Almost immediately Chamandy released a statement saying that he was forced out by the board. Some investors were shocked by Chamandy’s termination, and criticisms swiftly swelled into calls for the CEO of about 20 years to be returned to the company.

Amid the fallout, Gildan’s board said that over the last four years Chamandy “struggled to find additional avenues of long-term organic growth.”

As a result, the board lost confidence in Chamandy’s ability to power new revenue gains and develop Gildan – and began looking for a new CEO. The directors claimed Chamandy supported a succession plan, but later reneged his support, instead insisting that he remain as CEO for several more years and that Gildan undertake what the board characterized as high-risk acquisitions. Chamandy has denied such accusations, saying he didn’t intend to leave and that the succession was a failed process.

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. Chamandy attributed the drop, in part, to what he characterized as a kind of correction in demand that followed a rampant stock-up by customers in 2022 following inventory shortfalls in 2021.

*This article was updated Friday, Jan. 5 to reflect Turtle Creek's statement professing support of the plan from Browning West.