Skip to main content

Gildan Activewear Inc. GIL-T chief executive Vince Tyra, fighting to win support for his leadership ahead of a crucial shareholder meeting next month, says the Canadian T-shirt maker will push further into overseas markets and strengthen its main brands as it sets up its next leg of growth.

Speaking during an investor update Monday after his first 90 days as Gildan CEO, Mr. Tyra outlined how he’s spent his time so far. And he provided a snapshot of his general strategic priorities for the company, whose future could be decided in a proxy contest in the weeks ahead.

Mr. Tyra sees an opportunity to capitalize on the apparel maker’s low-cost manufacturing base and further expand sales from its stronghold in the United States to select international markets, such as Western Europe. His plans also include building up the company’s three main brands – Gildan, Comfort Colors and American Apparel – by emphasizing their comfort and quality, not just price and availability, in a bid to boost customer awareness and sales.

“We have a great company today and we’re simply looking to thinking about ways to enhance it,” Mr. Tyra said in an interview, adding that Gildan has to work on driving the demand for its factory output. He promised a comprehensive strategic plan in the fall.

Whether investors view Mr. Tyra’s vision as credible and ambitious is key because his future hinges on it, to an extent. Gildan’s board is locked in a fight with U.S. investment firm Browning West and other dissident shareholders over its decision to hire Mr. Tyra after dismissing long-time CEO Glenn Chamandy in December.

Directors say there was ample reason to let Mr. Chamandy go but the shareholders say the board botched the CEO succession process. Nine investors holding an estimated 35 per cent of Gildan’s stock have called publicly for Mr. Chamandy’s reinstatement. They say Mr. Tyra, a former executive at Fruit of the Loom, isn’t qualified to lead Gildan.

What’s happening at Gildan? A primer for the months-long CEO corporate battle

Gildan Activewear’s board puts company up for sale as battle for control continues

In his presentation, Mr. Tyra maintained the company’s previous financial forecast for 2024, with flat to low-single-digit revenue growth and adjusted earnings per share of between US$2.92 and US$3.07. He also introduced new medium-term targets covering 2025 to 2028, aiming to achieve net sales growth at a compound annual rate in the mid-single-digits range and adjusted EPS growth per year in the high-single to low-double-digit range during that time.

Under his leadership, Mr. Tyra said, the company will continue to increase its dividend and buy back shares, but in line with a leverage framework of 1.5 times to two times its earnings before interest, taxes, depreciation and amortization (EBITDA).

Browning West and its director slate, which includes Mr. Chamandy, have presented a more aggressive vision of Gildan’s earnings potential. In a 57-page presentation last month outlining why investors should support its campaign, the firm said it expects to more than double Gildan’s earnings per share and increase its stock price to more than US$100 over the next five years through a combination of operational changes, share buybacks and an improved executive compensation scheme.

The conflict has become one of the most acrimonious corporate power struggles in recent years in Canada, with personal attacks and lawsuits along the way. Adding to the intrigue: Gildan’s board is weighing takeover offers for the company after being approached by a potential buyer.

Browning West says Gildan Activewear failed to vet CEO, calls latest allegations a publicity stunt

Initial offers were due last week. Canaccord Genuity Group Inc. CF-T is advising the special committee of Gildan’s board that will consider the proposals. Gildan gave no update on the sales process Monday.

Browning West, which holds a roughly 5-per-cent stake in Gildan, is seeking to remove eight of Gildan’s 12 sitting directors and replace them with its own nominees. The matter will come to a head at the company’s annual meeting, scheduled for May 28, if it isn’t resolved before then.

Mr. Chamandy’s family founded Gildan and he delivered significant returns for investors over much of his time as CEO. The board says Mr. Chamandy’s track record had been more spotty in recent years, however. Directors have painted a picture of an increasingly unfocused CEO who was flailing from one strategy to another as he struggled to scale up an increasingly complex business.

Gildan bought American Apparel out of bankruptcy in 2017. Although the brand was considered edgy and marketed itself as ethically made, it has largely flailed under Gildan. Mr. Tyra said its brand equity has gone “dormant.”

Montreal-based Gildan produces most of its clothing at factories in Latin America and recently began operating a new plant in Bangladesh. The company does business internationally but generates nearly 90 per cent of its sales in the United States. It has an $8-billion market capitalization, making it one of Canada’s largest consumer product businesses.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe