A nearly half-year-long power struggle for control of Top 40 supplier Gildan (asi/56842) formally concluded Tuesday as shareholders of the multibillion-dollar publicly traded company elected a slate of eight new board members proposed by activist investors, cementing co-founder Glenn Chamandy’s return as CEO and president.

The election officially capped a corporate saga that began in December when a previous incarnation of Gildan’s board of directors fired Chamandy, claiming he’d become an ineffective leader incapable of growing the business and generating value for shareholders.

Glenn Chamandy, president, CEO and board director at Gildan (asi/56842)

A proxy fight swiftly flared, with activist investors led by Los Angeles-based investment firm Browning West leading a charge to overhaul the board and return Chamandy as CEO.

While former board members made a case to keep their seats, attacked Chamandy and voiced support for the CEO’s replacement, former Fruit of the Loom (asi/84257) and Broder Bros. executive Vince Tyra, they ultimately believed shareholders would support the Browning West candidates and resigned en masse on Thursday, May 23.

As those former board members and Tyra called it quits, they appointed the eight directors backed by Browning West, which include Chamandy. The new board then formally reappointed Chamandy as president and chief executive officer on Friday, May 24.

Despite all that, shareholders still needed to officially elect the new directors, which they did Tuesday, May 28 at the annual shareholders meeting. As the new board is loyal to Chamandy, he remains CEO/president of the company whose growth he spearheaded from a family-run business into a vertically integrated, global apparel manufacturer.

“I was a little saddened, I would say, by the way I think the board handled the succession – and handled me personally,” Chamandy said of the former board members who fired him, as he spoke to media after the shareholders meeting.

The proxy fight reportedly cost Gildan $65 million.

New Chairman Affirmed

In addition to Chamandy, the new board of directors includes Michener Chandlee, Ghislain Houle, Mélanie Kau, Peter Lee, Karen Stuckey, J.P. Towner and Michael Kneeland. Independent proxy firms such as Institutional Shareholder Services Inc., Glass Lewis and Egan Jones had recommended that these Browning West-backed candidates be elected.

Kneeland is the new non-executive chairman of Gildan’s board. In stumping for Kneeland, Browning West shared that he is the former CEO and current chair of United Rentals Inc., a $60 billion enterprise value (EV) equipment-rental business with more than $14 billion in revenue and nearly $7 billion in earnings before interest, taxes, depreciation and amortization (EBITDA).

“We look forward to putting this contest behind us so that we can focus our energy on implementing our operating plan and positioning Gildan for long-term success.” Michael Kneeland, Gildan Board of Directors

“Gildan has an impressive 40-year history anchored by strong long-term operating results, an outstanding employee base and a founder who has demonstrated a clear ability to oversee an increasingly global business and has an unrivaled track record of value creation,” Kneeland said. “It is an honor to be joining Gildan as chair alongside Glenn and the entire slate of directors. We look forward to putting this contest behind us so that we can focus our energy on implementing our operating plan and positioning Gildan for long-term success.”

Chamandy and the new directors have proposed a five-pillared plan that they say, if executed correctly, could increase the company’s share price to more than $100 within five years. It was approaching $38 the afternoon of May 28.

The plan includes initiatives like taking on more debt to fund growth and increasing market share in the fashion-basics category by lowering unit costs. The plan says the fashion-basics gain can be achieved by relocating production of such basics from Honduras to Bangladesh, where Gildan already has a clothing factory.

Yowzers – The #Gildan corporate war is over, and Glenn Chamandy and the activist investors who backed him have won. https://t.co/xSX67MeJU1

— Chris Ruvo (@ChrisR_ASI) May 24, 2024

The Gildan corporate saga has had many plot twists, including: lawsuits advanced in both directions; talk of selling Gildan, possibly to a private equity firm with Top 40 promo connections (this is now off the table); the resignation of five board members who fired Chamandy, who replaced themselves with directors who resigned last week; and, among other curve balls, Gildan executives publicly calling for the return of Chamandy.

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.

Gildan reported that total global full-year sales across all its business divisions – more than just promo – fell 1.4% year over year in 2023 to about $3.19 billion. Sales and earnings declined in the first quarter of 2024.