In a dynamic turn of events, Gildan Activewear Inc., renowned for its American Apparel brand, is navigating intense shareholder scrutiny over the appointment of Vince Tyra as the new CEO. Despite opposition, the board stands firm, leading to strategic maneuvers in this ongoing power struggle.
The company, boasting a global workforce of 51,000, has expedited Tyra’s CEO start date to Monday, deviating from the initially slated Feb. 12. This move is a pivotal development in the continuous clash between directors and investors for control of the Montreal-based T-shirt and apparel giant.
Major shareholders, including Browning West LP with a significant 5% stake, question Tyra’s suitability, labeling his track record as «weak credentials.» Browning West spearheads a campaign to overhaul the board, advocating for the reinstatement of former CEO Glenn Chamandy, who was ousted in early December.
Supporting Browning West are influential shareholders holding over 20%, such as Jarislowsky Fraser, Janus Henderson, Cooke & Bieler, Anson Funds, Oakcliff Capital, Cardinal Capital, and Turtle Creek Asset Management.
In response to mounting tensions, Gildan justifies Tyra’s accelerated start, citing the need for early engagement with key stakeholders and emphasizing the infusion of stability and leadership. Board Chair Donald Berg defends the selection process, emphasizing the necessity of a hands-on CEO with fresh ideas and deep apparel experience in a competitive market.
Gildan highlights Tyra’s past successes, including his role in restructuring Fruit of the Loom before its acquisition by Berkshire Hathaway Inc. in 2001. Tyra’s most recent position was as the senior vice-president of corporate strategy, mergers & acquisitions at Houchens Industries Inc., an employee-owned conglomerate with interests in retail, construction, and other sectors.
Browning West remains undeterred, alleging that Gildan’s board seeks to circumvent shareholder opposition and divert attention from the requested special meeting. The investment firm proposes a slate of directors, including Michael Kneeland, Chair of United Rentals Inc., and former executives from Nike Inc. and Walmart Inc. Stifel Financial analyst Martin Landry suggests that Gildan’s board may have limited options but to concede to Browning’s request for a shareholder meeting. Acknowledging the saga’s unfortunate nature, Landry notes that public allegations from both the board and the former CEO could leave lasting scars on stakeholders.
