Gildan Activewear Publishes Investor Presentation for 2024 Annual Meeting
May 13 2024 - 7:15AM
Gildan Activewear Inc. (GIL; TSX and NYSE) today announced that it
has published an investor presentation, entitled “Successfully
Driving Long-Term Value for All Shareholders”, in connection with
its upcoming 2024 Annual Meeting of Shareholders (the “2024 Annual
Meeting”) to be held on May 28, 2024. The investor presentation
will be available at http://www.futureofgildan.com and on the
Company’s 2024 Annual Meeting page.
Key highlights of the presentation include the
following:
- Why the refreshed Board is
excited about Gildan’s future:
- Gildan is an industry-leading
company with a strategic moat around its business – given its
competitive position and advantageous cost structure, the company
should be a winner.
- Gildan has a clear path to value
creation through EBITDA expansion as delivered through its Gildan
Sustainable Growth (GSG) strategy, based on its key pillars of
Growth, Innovation, and ESG.
- Gildan has a strong leader in Vince
Tyra and a strong management team in place that can deliver value
creation for all shareholders through the execution of his enhanced
GSG plan.
- Gildan’s recently refreshed board
is highly collaborative and will work collegially and
constructively to oversee management’s delivery of the GSG plan and
will hold management accountable.
- Gildan’s recently refreshed board
excels at creating alignment, which will resolve the current
alignment problem between the legacy board, management, and a group
of shareholders being instigated by an opportunistic activist.
- Gildan’s newly refreshed
Board contains the right mix of fresh perspectives, historical
continuity, and investor input.
- Gildan recommends the election of
five newly-appointed independent directors, four incumbent
independent directors, and two independent director nominees from
the dissident’s slate – all with the necessary experience,
expertise, and skills needed to maximize Gildan’s full potential
and mitigate further disruption.
- The newly constituted Board is the
result of a thorough, deliberate process that was rooted in
extensive shareholder engagement, having held 87 meetings,
including across Gildan’s 25 top shareholders and those who
Browning West has deemed as supportive.
- Glenn Chamandy is no longer
the CEO that Gildan needs and there was a clear case for change in
2023 after he irreparably broke the trust of Gildan’s
Board.
- It became apparent to the Board as
early as in 2021 that it was time to prepare for a Gildan without
Mr. Chamandy. The Board discussed succession planning with Mr.
Chamandy for many years. Mr. Chamandy himself agreed that change
was needed when he told the Board in 2021 that he would retire in
3-5 years. Despite this, Mr. Chamandy sabotaged the process when it
came time to execute on the succession plan.
- The case for change in 2023
was clear:
- Mr. Chamandy was gradually more
disengaged in Gildan’s business, averaging only 4 days in the
office per month in the six months prior to his termination and
sending out no more than a handful of work-related emails each
day.
- Mr. Chamandy was distracted by
outside personal pursuits including the development a luxury golf
resort in Barbados.
- Mr. Chamandy never visited Gildan’s
newest manufacturing plant in Bangladesh, a major investment for
the company.
- Mr. Chamandy held few senior
management meetings.
- Mr. Chamandy failed to govern
himself in accordance with acceptable standards of behavior for a
chief executive, such as recording a private and confidential phone
call with former Chair Donald Berg, without Mr. Berg’s
knowledge.
- Instead of putting forward a
compelling strategy, Mr. Chamandy attempted to entrench himself by
giving the Board an ultimatum: approve a high-risk
multi-billion-dollar acquisition strategy predicated on
guaranteeing his role as CEO for several more years to oversee its
integration, or he would leave the Company immediately and sell his
shares.
- Gildan’s business was losing
momentum, growth was stalled, and share price performance had been
stagnating for the past ~10 years.
- While the Board was focused on an
orderly transition, Mr. Chamandy’s sabotage of an agreed succession
plan and his insistence of a risky and dilutive
multi-billion-dollar acquisitions strategy left the Board with no
choice but to terminate him.
- As he left, he also violated
company polices related to the safeguarding of corporate
information by wiping data from his Gildan communication
devices.
- Vince Tyra is exactly the
right CEO to scale Gildan in an increasingly complex and fiercely
competitive global environment.
- The Board undertook a robust and
structured CEO succession planning process and at the conclusion of
this process selected Vince Tyra as CEO.
- Few people have had the opportunity
to demonstrate their leadership skills across such an impressive
range of industries and managerial challenges as Vince Tyra. The
throughline of Vince’s career is using his financial acumen, sound
management and ability to build teams and motivate people around a
shared strategy and vision to improve the companies and
organizations he has led.
- Houchens Industries: As Senior
Vice-President of Corporate Strategy and M&A, Vince led the
strategic growth of this $4 billion revenue employee-owned holding
company through investments in sectors including consumer products
and retail.
- University of Louisville: In
perhaps the most challenging turnaround of his career, Vince fixed
the scandal-plagued Athletics Program at the NCAA powerhouse. Under
his leadership, Vince established a new culture of excellence and
compliance while rebuilding the sports program.
- Southfield Capital: As an Operating
Partner and Investment Committee Member at Southfield, Vince helped
achieve industry leading returns by positively impacting many
portfolio companies in various leadership positions. At Southfield,
Vince’s portfolio produced strong returns, with an internal rate of
return of 27% and a multiple of invested capital of 3.2x.
- Broder Bros.: As CEO of Broder,
Vince spearheaded a successful series of acquisitions, including
Alpha Shirts – later named Alphabroder, tripling EBITDA – the basis
for value creation at private equity firms. Under Vince’s
leadership, Broder successfully executed Bain Capital’s levered
roll-up strategy and transformed itself into the market
leader.
- Fruit of the Loom: Vince joined
Fruit of the Loom from 1997 to 2000 where the board of directors
promoted him to President during a tumultuous time where he
developed and implemented a successful restructuring plan ahead of
its eventual sale to Berkshire Hathaway.
- In addition, Vince invested in and
grew his own activewear business early in his career, while
utilizing Gildan as a key supplier.
- Vince has served on the board of
directors at 10 companies and stepped in as interim CEO at three
companies.
- Vince hit the ground running in his
role as President & CEO of Gildan and has prioritized
consistent engagement with the various stakeholders of Gildan,
including:
- Visiting 18 offices and
manufacturing sites to get immersed in Gildan’s processes and
cultures,
- Attending various trade shows to
reinforce his presence and reconnect with customers,
- Holding town halls and interacting
with approximately 94% of Gildan’s global leadership base as well
as over 2,000 employees to create a two-way dialogue,
- Kicking off dialogue with major
partners to better understand challenges and opportunities,
and
- Putting forward an enhanced GSG
strategy that reflects the input of shareholders and leverages
Gildan’s manufacturing strength by growing its commercial
capability.
- After Mr. Chamandy’s termination,
the Board retained renowned independent corporate governance
expert, Dr. Richard Leblanc to evaluate Gildan’s CEO succession
planning process. His report concluded that the Board took a series
of “reasonable steps” that would be expected of a Canadian public
company board. Among his key findings, Leblanc stated: “Based on my
review, it is my opinion that the Board acted in a manner
consistent with prevailing standards of corporate governance for
CEO succession planning, and the duties and obligations owed by
directors to Gildan, during the time from May 2021 to the
letter of termination of the former CEO, dated December 10,
2023.”
- Gildan has a thoughtful,
long-term plan in place and is successfully executing its strategic
priorities. Conversely, Browning West and Glenn Chamandy’s plan
puts shareholders at risk.
- The Company’s enhanced GSG
strategy, which reflects feedback received from shareholders and
their desire for us to continue sustainably growing Gildan is an
actionable, realistic plan that enables the Company to leverage its
strengths and accelerate value creation for shareholders and other
stakeholders.
- Unlike Gildan’s thoughtful plan,
Browning West and Mr. Chamandy’s strategy is an unrealistic
“marketing” plan fueled by improbable operating projections with
the sole purpose of gaining votes and winning the proxy fight.
Further, Mr. Chamandy’s strategy has recently evolved into a “bait
and switch” strategy that lacks credibility and conviction. Mr.
Chamandy’s plan which was presented to Gildan’s Board in October
2023 was a risky strategy with limited organic growth prospects and
presented a value cap on Gildan without any acquisitions.
Drastically, only 5 months later, Browning West and Mr. Chamandy’s
new strategy has completely shifted to growing sales through market
share gains and boosting short-term returns via aggressive and
risky financial engineering – all with highly aggressive,
unrealistic financial projections.
- Browning West has and
continues to repeatedly ignore Gildan’s good faith efforts to find
common ground – and ultimately – a resolution for the benefit of
all shareholders.
- Gildan’s Board has attempted to
engage Browning West on multiple occasions to end this costly,
disruptive proxy fight and reach a settlement, but Browning West
continues to refuse to engage constructively.
- Browning West is solely focused on
taking control of Gildan without paying a premium and is not acting
in the best interests of all shareholders.
VOTE THE BLUE
PROXY CARD TODAY
The Board urges all shareholders to protect
their investment by voting “FOR” all the nominees recommended by
Gildan– all ten of Gildan’s director nominees and as well as Karen
Stuckey and J.P. Towner on the BLUE Proxy Card. We encourage
shareholders to disregard any gold proxy card sent to you by
Browning West. Only the latest dated proxy card will count at the
2024 Annual Meeting. As Gildan is using a “universal” proxy
containing all the Gildan nominees as well as the other nominees
proposed by Browning West, there is no need to use any other proxy
regardless of how you propose to vote.
To view the presentation, or for more
information about the 2024 Annual Meeting, please visit:
www.futureofgildan.com. Shareholders who have any questions or need
assistance voting may contact the Company’s proxy solicitor,
Kingsdale Advisors, toll-free at 1-888-518-6813.
Caution Concerning Forward-Looking
StatementsCertain statements included in this press
release constitute “forward-looking statements” within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995 and
Canadian securities legislation and regulations and are subject to
important risks, uncertainties, and assumptions. This
forward-looking information includes, amongst others, information
with respect to our objectives and strategies to achieve these
objectives. Forward-looking statements generally can be identified
by the use of conditional or forward-looking terminology such as
“may”, “will”, “expect”, “intend”, “estimate”, “project”, “assume”,
“anticipate”, “plan”, “foresee”, “believe”, or “continue”, or the
negatives of these terms or variations of them or similar
terminology. We refer you to the Company’s filings with the
Canadian securities regulatory authorities and the U.S. Securities
and Exchange Commission, as well as the risks described under the
“Financial risk management”, “Critical accounting estimates and
judgments”, and “Risks and uncertainties” sections of the Company’s
Management’s Discussion and Analysis for the year ended December
31, 2023 (“FY2023 MD&A”) for a discussion of the various
factors that may affect these forward-looking statements. Material
factors and assumptions that were applied in drawing a conclusion
or making a forecast or projection are also set out throughout such
document.
Forward-looking information is inherently
uncertain and the results or events predicted in such
forward-looking information may differ materially from actual
results or events. Material factors, which could cause actual
results or events to differ materially from a conclusion or
projection in such forward-looking information, include, but are
not limited to changes in general economic, financial or
geopolitical conditions globally or in one or more of the markets
we serve, including the pricing and inflationary environment, and
our ability to implement our growth strategies and plans, as well
as those factors listed in the FY2023 MD&A under the “Risks and
uncertainties” section and “Caution regarding forward-looking
statements” sections. These factors may cause the Company’s actual
performance in future periods to differ materially from any
estimates or projections of future performance expressed or implied
by the forward-looking statements included in this press
release.
There can be no assurance that the expectations
represented by our forward-looking statements will prove to be
correct. The purpose of the forward-looking statements is to
provide the reader with a description of management’s expectations
regarding the Company’s future financial performance and may not be
appropriate for other purposes. Furthermore, unless otherwise
stated, the forward-looking statements contained in this press
release are made as of the date of this press release, and we do
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events, or otherwise unless required by
applicable legislation or regulation. The forward-looking
statements contained in this press release are expressly qualified
by this cautionary statement.
About GildanGildan is a leading
manufacturer of everyday basic apparel. The Company’s product
offering includes activewear, underwear and socks, sold to a broad
range of customers, including wholesale distributors,
screenprinters or embellishers, as well as to retailers that sell
to consumers through their physical stores and/or e-commerce
platforms and to global lifestyle brand companies. The Company
markets its products in North America, Europe, Asia Pacific, and
Latin America, under a diversified portfolio of Company-owned
brands including Gildan®, American Apparel®, Comfort Colors®,
GOLDTOE® and Peds®.
Gildan owns and operates vertically integrated,
large-scale manufacturing facilities which are primarily located in
Central America, the Caribbean, North America, and Bangladesh.
Gildan operates with a strong commitment to industry-leading
labour, environmental and governance practices throughout its
supply chain in accordance with its comprehensive ESG program
embedded in the Company’s long-term business strategy. More
information about the Company and its ESG practices and initiatives
can be found at www.gildancorp.com.
Gildan Media Relations
+1 514 343-8814
communications@gildan.com
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