T-shirt maker Gildan Activewear Inc has posted a downturn in first quarter net earnings as its founders prepare to abandon majority control of the company.
The Montreal-based firm, founded by brothers Greg and Glenn Chamandy, reported net earnings of US$2.9 million for the period, a 21.6 per cent year-on-year slump.

The company cited the accounting impact of its switch to using the US dollar as its reporting currency for the fall in earnings.

However, first quarter sales rose 20 per cent to US$78m, compared to $65m in the same period a year earlier.

The sales increase was attributed to a 21.9 per cent increase in unit shipments and a higher-valued product mix, partially offset by lower selling prices.

To coincide with the first quarter results announcement, the Chamandy brothers said they wanted to convert their class B multiple voting shares into class A subordinate voting shares, reducing their stake in the company from 61 per cent to 24 per cent.

The decision, still to be approved by Gildan's board, means that the brothers would not be able to block any takeover bid that other shareholders approve.

"We believe that this is a logical and appropriate initiative for the company at this point in its corporate development," Greg Chamandy said, adding that neither brother would receive any compensation for the share conversion.

"We believe that this initiative is consistent with our commitment to strong corporate governance."