Glenn Chamandy sets the record straight on the Gildan Board's poor governance, misrepresentations to stakeholders and obsession with self-entrenchment

Glenn J. Chamandy, former President and CEO and co-founder of Gildan Activewear Inc., today issued the following statement:

MONTREAL, Jan. 23, 2024 /PRNewswire/ - In light of the media attention devoted to my dismissal from Gildan Activewear Inc. ("Gildan" or the "Company") and subsequent unfounded allegations directed my way by the Company's board of directors, which are false, defamatory and misleading, I am left with no choice but to set the record straight.

On December 10, 2023, I was terminated without cause by the board of directors of Gildan (the "Board"). Despite my successful track record and ongoing hands-on leadership, the Board chose to terminate me in this manner without my involvement and with no basis in shareholder engagement.

This led to an immediate outcry from an impressive number of Gildan's longstanding and sophisticated shareholders, several of whom expressed their grave concerns and protested the Board's decision. As we all know, a significant loss in shareholder value ensued. All of this culminated in Browning West, LP's formal requisition of a Special Meeting of Gildan's shareholders to reconstitute the Board.

In response to such protests and the pending proxy contest, in which the Board's conduct is squarely at issue, rather than taking corrective or remedial actions, as requested by me through my legal advisors, the Board willfully and abusively decided to orchestrate and perpetuate a systematic plan to undermine my reputation, credibility and character, even though it was their unilateral decision to terminate me on a without cause basis in the first place.

The Board's poor governance, failed shareholder engagement, and obsession with self-entrenchment has been on full display.

Allegations relating to a so-called "ultimatum"

One of the Board's allegations to try to retroactively justify their decision is that I would have presented the Board with an ultimatum to "[e]ither support [my] acquisition strategy and resulting succession plan, or [I] would immediately leave and sell [my] stock", an ultimatum which I would have reiterated in the November 25 Letter. These are not the facts.

On October 31, 2023, at the request of the Board, I presented a long-range planning proposal ("LRP") prepared by Gildan's management team. Such a strategic planning process is typically conducted annually in the normal course of business.

The LRP provided material long-term organic growth driven by Gildan's publicly disclosed growth strategy (GSG), supported by the development of Gildan's new large-scale, state-of-the-art vertically integrated manufacturing facility in Bangladesh, as well as a new major innovation cycle across all styles and product categories launched in January 2024, which was well-endorsed by Gildan's management team. We also reviewed several different inorganic options, which we do every year. There was never any engagement with inorganic options, and there was never any ultimatum regarding such options.

To be clear, in my November 25 letter, I did advise the Chairman in writing that it was an untenable position on the part of the Board to allow shareholders, prospective shareholders and important stakeholders to operate under the assumption that I was the continuing CEO when the determination regarding the need to terminate my employment had already been made. Gildan had just announced an excellent quarter, with excellent meetings with shareholders who were in the blind regarding the Board's plan. I warned the Board that they were choosing a path leading to value destruction and putting the Company at risk. I demanded immediate clarity, and it is that, and only that, which could possibly have been interpreted as an ultimatum.

Allegations of ineffective leadership and lack of engagement

The Board also made a number of unfounded and defamatory allegations that implied I was an ineffective leader who lacked engagement, which allegedly gradually eroded the Board's trust in me over the last four (4) years. None of these allegations was ever raised with me, not even upon my termination on a without-cause basis. This also clearly contradicts the Company's own public disclosure and compensation decisions.

The Board's decisions relating to my compensation (including achievement of objectives) and related public disclosure do not suggest that the Board's assessment of my performance was anything but excellent throughout. You will not find anywhere in any disclosures made or endorsed by the Board, any commentary regarding my performance which is less than very positive.

My personal projects have also been brought forward as an allegation of my lack of engagement. First, such projects were explicitly disclosed annually to the Company and were never called into question in any way by the Board. Second, my management style had not changed in recent years. I was deeply engaged at every level with a transparent "hands-on" and "open door" approach with members of the management team at all levels and employees as well. I was involved in every aspect of the business: product development, capacity planning, inventory management, cotton hedging, financial budgeting, business development and strategic planning and execution, and succession planning.

It has always been my priority to understand how the entire Gildan organization viewed my strategy, leadership style and engagement. It was under that view that I encouraged the Chairman of the Board to meet privately with our over 50 vice presidents to gather their input. Pursuant to this retroaction process the Chairman has never put into question any aspect of my level of engagement.

Allegations of selective disclosure to shareholders

For the CEO of a public company, the allegation of selective disclosure is very serious. Among its allegations, the Board claims I improperly engaged with shareholders prior to my termination, implying that I showed preferential treatment towards certain shareholders – again untrue. My active engagement with shareholders as CEO of the Company has always been undertaken as part of the normal course of my duties and the Company's affairs. The engagement of the CEO of a publicly traded company with its shareholders is a core part of the role, is customary and is critical to fostering trust and confidence from investors. I did not have any improper one-on-one interactions with any representative or agent of any shareholder of Gildan.

It is in this context and for the same purposes that a visit to the Honduras manufacturing plant was organized by the Company's investor relations team with representatives of Browning West, LP. This visit was not concealed from the Board but, quite to the contrary, was arranged by the Company's investor relations team. Other members of the Company's management and manufacturing team attended the visit.

Not only was this visit not "hosted by the CEO" as alleged by the Board, but in fact, my participation was not even initially contemplated when planning began. The visit had long been scheduled by the Company's investor relations team, was initially scheduled to be held in September 2023 and only postponed to November due to scheduling conflicts. Some of Browning West, LP's financial partners also attended. The visit was formally documented in the logbook of plant visits that is maintained and updated by the Company's investor relations team (the "Logbook").

The Board's allegation that it "has no record in recent history of any other Gildan shareholder and their own investors being hosted by the CEO to an exclusive visit to a Gildan facility" – implying that I had, by this visit, given Browning West, LP a preferential treatment – is simply false and, again, misleading information deliberately conveyed by the directors to the market. Similar tours of the facility in Honduras had been arranged by the Company's investor relations team for other shareholders, including Coliseum Capital Management, LLC, as recently as in June 2023, which should also be formally documented in the aforementioned Logbook.

All of these are serious acts of defamation. Sadly, I am but one of many victims of the Board's rogue behaviour and value-destroying actions. Gildan's employees, customers and shareholders are now facing an uncertain future because of it.

The facts are that my family and I established Gildan Activewear with a vision to offer outstanding customer value, positively impact our communities, and deliver enduring shareholder value. Today, Gildan is a world-class, low-cost, vertically integrated manufacturing company – a Canadian leader with almost 30 facilities worldwide that sells its products across the globe. 

In the past four years alone, earnings per share increased by 87 percent, adjusted operating margins increased to 20 percent from 14 percent, and net sales increased by 15 percent. This strong financial position has delivered consistent buybacks and dividends to shareholders, which delivered in excess of $1.3 billion to shareholders over the past four years. Note that this period included the COVID-19 pandemic and two hurricanes impacting our operations in Honduras.

The Board seems to be intent on destroying that legacy. Through legal counsel, I have formally demanded that the Board members cease and desist their disruptive and orchastrated tactics with a view to damage my reputation.

This press release does not constitute a solicitation of a proxy within the meaning of applicable laws, and accordingly, Gildan shareholders are not being asked to give, withhold or revoke a proxy.

SOURCE Glenn J. Chamandy