Gildan’s board of directors added in the open letter to its shareholders that keeping former CEO Glenn Chamandy in place, as demanded by the shareholders, would have “destroyed shareholder value”.
The directors added that Chamandy had “no credible long-term strategy and no vision for the future”.
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The board claimed it was left with no option but to remove Chamandy after he asked it to approve a multi-billion dollar acquisitions strategy, that would require him to remain in place as CEO for several more years to oversea the integration.
The directors said they were concerned about the high-risk acquisitions proposed and asked for a thorough analysis of the plan, including risks and mitigation.
The letter suggested Chamandy threatened to immediately leave Gildan and sell his shares if the board did not approve his plan.
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The letter also claimed the board had originally agreed a three-year succession plan with Chamandy in December 2021 with the CEO previously due to retire in December 2024.
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By GlobalDataHowever, the letter stated the board felt it was necessary to terminate Chamandy as CEO on 10 December 2023 following the ultimatum he allegedly presented them with.
The letter stated: “Chamandy has attempted to frame this as a dispute over the board’s CEO succession process. That is not what this is about. This is about the future of Gildan.”
Chamandy could not be reached for comment prior to going to press, however he published a statement denying the allegations regarding a so-called ultimatum in December.
The former president and CEO and co-founder of Gildan Activewear said at the time: “Contrary to media reports, I gave no ultimatum to Gildan’s board with respect to any strategy or potential acquisitions”.
He continued: “This is a sideshow to distract from the reaction the shareholders have had with respect to the board’s handling of succession planning, in which I was not involved. I did not and could not orchestrate or control the events; the board conducted the process.”
Gildan’s board also alleged that Chamandy had “struggled to scale an increasingly complex organisation” in recent years and instead “jumped from one opportunistic strategy to another”.
The board cited branded products, retail distribution, international expansion and yarn production as recent examples of this.
The letter also claimed that Chamandy was “increasingly focused on outside personal pursuits” away from his role as CEO, including the development of a golf resort in Barbados. As a result, the board claimed he was “rarely in the office”.
The board added the outgoing CEO did not visit the company’s new manufacturing plant in Bangladesh nor had it visited Gildan’s operation in the country for more than a decade.
The board also alleged that Chamandy has “violated company policies” on the safeguarding of corporate information, which it says it is investigating.
The letter follows a campaign from shareholders Browning West aiming to reinstate former CEO Chamandy, which the Gildan directors have called “misguided”.
The board said it would have “preferred to keep many of these details private,” but claimed that “public misinformation tactics” from Chamandy and Browning West had forced them into responding publicly.
The letter also responded to claims about Gildan’s new CEO Vince Tyra, who previously worked at Fruit of the Loom. The board said: “Far from being part of the problem at Fruit of the Loom, Tyra was a key part of the solution. The board is resolute in its belief that he will be part of the solution at Gildan as well.”
The letter concluded: “Chamandy has spent weeks telling a false and misleading story about recent events at Gildan. Many well-intentioned investors have bought into that false story. The board will continue to patiently, yet firmly, set the record straight. We look forward to continuing our conversations with shareholders.”
Browning West had not responded to Just Style’s request for comment at the time of going to press.
In November 2023, Gildan reported a drop in profits during the third quarter of 2023 following lower demand and higher costs.
