Vince Tyra, the new CEO of Gildan Activewear Inc., is engaged in a battle for control of the $7-billion company.Christopher Katsarov/The Globe and Mail
It’s a little-known fact in Canadian business circles that the two men currently at the centre of one of the country’s most bitter corporate battles in years are friends. At least, they used to be.
Glenn Chamandy and Vince Tyra have sipped whisky and fished together, laughed over mischievous monkeys stealing their sports equipment in Barbados and played the greens in knee-high socks at the storied Royal Montreal Golf Club. It was Mr. Chamandy who oversaw a clothing factory in Honduras and who hosted Mr. Tyra and showed him its inner workings, and Mr. Chamandy who invited him to another plant in the Dominican Republic, where they took a helicopter because the roads were washed out. They’ve known each other since they were young bucks trying to make it in the apparel industry in the 1990s.
Today, some 30 years later, they’re at opposite ends of a war for control of apparel maker Gildan Activewear Inc. GIL-T, a company with a stock market value of $7.9-billion whose T-shirts and fleece make up the standard garb for countless amateur sports teams and school clubs. Who will triumph? Who knows. But this personal dimension makes the unfolding fight even more compelling.
Former Gildan CEO Glenn Chamandy at the company's annual meeting in February 2015. Mr. Chamandy was ousted from his role at Gildan in December 2023.Paul Chiasson/The Canadian Press
Mr. Chamandy is the silver-haired Quebec business legend whose family started Gildan. He was unceremoniously dumped after a 20-year run as chief executive officer last December by a board of directors who say they gradually lost faith in his leadership before he forced their hand with an ultimatum of risky takeover proposals. But a group of dissenting shareholders led by U.S. investment firm Browning West is now trying to push for his return by ousting the directors that ousted him.
Mr. Tyra is the CEO brought in as his replacement, a former college baseball pitcher from Louisville, Ky. He’s perhaps best known for fixing the University of Louisville’s scandal-plagued athletics program over three years to 2021. He started his career as an entrepreneur in his 20s, borrowing as much money as he could to start an activewear clothing distributor carrying T-shirts made by Fruit of the Loom and Gildan. He later led Broder Bros., Gildan’s biggest distributor.
Rarely has corporate Canada seen a clash over the sudden replacement of a CEO generate as many rapid-fire attacks and ripostes as in the feud over Gildan. And if much of the attention in the early rounds was focused on Mr. Chamandy and his alleged shortcomings, it now turns to Mr. Tyra and what he can offer.
The clock is ticking on the May 28 annual meeting that could decide Mr. Tyra’s fate. And the key to his survival as CEO hinges on whether he’ll be able to woo enough shareholders who believe in him. Browning West wants him gone, and so do some other long-time Gildan institutional investors such as Jarislowsky Fraser Ltd. and Turtle Creek Asset Management. Browning’s founders have called him “a significant downgrade” from Mr. Chamandy, and someone with a “track record of value destruction.”
But here’s the thing about Vince Tyra: When you meet him, as The Globe and Mail did last week for lunch in Toronto, you quickly realize he’s not fazed by the pressure and personal attacks on his credentials. He’s got a calm disposition, a healthy ego and a self-described “thick skin.” He says the process to vet him was thorough – almost to the point of being intrusive. Besides, he says, he’s been here before.
This is the fourth time in his career Mr. Tyra has been hired to replace a long-standing senior leader at an organization, including his recent stint at the University of Louisville. So he’s used to the drama and noise that comes with being the perceived usurper. To hear him tell it, two of the most vocal university donors in Louisville who initially blasted his arrival provided seven-figure gifts for his initiatives by the time he left. In his mind, Gildan represents a similar opportunity to prove the doubters wrong.
“For those that are open to listen – because some have a conviction otherwise – I give them facts,” Mr. Tyra says when asked what he’s telling investors he’s met with since starting in mid January. “I tell them about what I’ve done, why I’ve been asked and invited to all these opportunities that I’ve been a part of. I didn’t go around begging for any of them. And I don’t need this one either, to retire or build my legacy. I’m doing it because I want to do it. I really think a lot of this company and what we can do.”
How Mr. Tyra ended up at Gildan remains a matter of contention. Directors at the company insist it’s the result of a rigorous and carefully-planned CEO succession process, one that only got derailed at the very end when Mr. Chamandy realized his time was up and refused to co-operate with a leadership handover. The board terminated him without cause shortly afterward.
Vince Tyra was brought in to replace former Gildan CEO Mr. Chamandy. It's the fourth time in his career Mr. Tyra has been hired to replace a longstanding senior leader at an organization.Christopher Katsarov/The Globe and Mail
Mr. Chamandy has a different version of events, telling The Globe in an interview in December that he never gave any hints he was interested in retiring. “I always told the board that I’m here forever,” he said. Dissident shareholders say the board botched the succession because Mr. Chamandy should have been much more involved in the process. And they say shareholders, too, should have been informed of the coming change.
Mr. Tyra says he knew he might be plunged into a messy situation, given Mr. Chamandy’s standing as Gildan’s founder. He says he would have loved to reach out to Mr. Chamandy during the recruitment process, but couldn’t because he’d signed a nondisclosure agreement and couldn’t talk to anyone about it.
“You don’t always know how it’s going to go,” Mr. Tyra says, adding he and Mr. Chamandy got to know each other pretty well over the years and had a good personal and professional friendship.
“I think it’s hard for founders to find the right time and know when to step away … I don’t know exactly what happened, what was going through his mind and what he thought was right or wrong. But at some point there is a transition and the board obviously had unanimous conviction that they felt the time was right. And you have to adjust to that.”
Listening to Mr. Tyra speak, it’s clear he harbours an affection for Mr. Chamandy and a respect for the clothing company the Quebecker built, including the management team still in place. “They’re pros,” he says, and they’re bringing him up to speed quickly on Gildan’s inner workings, despite their past allegiance to Mr. Chamandy. “That doesn’t always happen,” he says. “It speaks a lot” to those senior executives.
But this isn’t about resting on past laurels. Mr. Tyra also has questions about Gildan’s recent performance and strategies. Why, for example, has its revenue seemingly stalled in the range of US$2-billion to US$3-billion for almost a decade? What investments has the company made beyond the factory floor to drive growth? And have recent acquisitions yielded the returns that were expected?
Over the past 10 years alone, Gildan has bought hosiery maker Doris Inc., T-shirt and sweatshirt maker Comfort Colors, Peds Legwear and Alstyle Apparel. It also snapped up bankrupt Los Angeles-based retailer American Apparel, an awkward transaction that saw the sexually-tainted brand land at a company that makes kids hoodies and adult compression socks.
Gildan can further energize the American Apparel brand, Mr. Tyra says. And its new factory in Bangladesh will boost organic growth. He declined to elaborate deeply on strategy, citing Gildan’s current quiet period ahead of its earnings report later this month. But it seems clear that if Mr. Chamandy perfected the business of low-cost manufacturing in factories in Honduras and elsewhere, Mr. Tyra will pay more attention to marketing and brand development than Gildan has in the past.
“You can bully your way through with pricing and volume and all that” as an efficient manufacturer, Mr. Tyra says. “But what’s happening on the other end?”
Already you’ve seen the new CEO jump into the social media spotlight to try to increase Gildan’s visibility, posting a video of himself at the ImpressionsExpo trade show this month, as well as selfies with employees. The father of five, whose parents came from “union families growing up eating out of the garden,” has 24,000 followers on X. His guiding principle in work and life: “Be fearless to do the right thing.”
In Mr. Tyra’s early meetings with investors, one thing that has repeatedly come up is his time as an executive of Fruit of the Loom. During his two-and-a-half years at the underwear maker from 1997 to 2000, its share price declined 99 per cent and it filed for bankruptcy protection – hardly something to point to on a resume, according to Browning West.
Mr. Tyra sees it another way. He says the company was already in trouble when he joined, with heavy debt on the balance sheet and executives leaving. Fruit of the Loom eventually idled production so much it couldn’t fill orders, jeopardizing its reputation. Directors came to Mr. Tyra, who was head of the activewear unit at the time, and another executive for help, asking what they would do. They took his advice, and promoted him to see it through.
The key to Mr. Tyra's survival as CEO hinges on whether he’ll be able to woo enough shareholders before the May 28 annual meeting that could decide his fate.Christopher Katsarov/The Globe and Mail
He proposed consolidating the sales and marketing functions of the company’s two major divisions, and selling off its sports licensing arm and anything else not considered central to the business. He also advised implementing manufacturing efficiencies. “It had gotten so convoluted that we were offering, in a white basic brief, a two-pack, three-pack, four-pack, six, seven and nine packs,” he says. “So we narrowed the focus.”
He presented the plan to bondholders and they endorsed it, Mr. Tyra says. “I was effectively the last man standing to solve where we were going to go,” he says. “And it worked.” Berkshire Hathaway Inc. bought the company two years after he left.
Gildan’s board sums up the episode as a move by Fruit of the Loom directors to tap a talented executive during the company’s darkest hour. “Vince Tyra is exactly the leader Gildan needs,” Gildan chairman Donald Berg said in an e-mailed statement. “We needed a person with all the leadership qualities and experience to inject a fresh perspective and new energy into an otherwise profitable and successful organization.”
Some shareholders conclude the opposite: that his tenure at Fruit of the Loom is an example of leadership failure and that he made a dark situation even darker. Berkshire Hathaway bought the company at a fraction of the enterprise value it had when Mr. Tyra arrived.
Gildan directors should not have replaced Mr. Chamandy, says Browning West co-founder Usman Nabi.
“The board stole defeat from the jaws of victory, which is why shareholders are so upset and not just us,” Mr. Nabi said in an interview, adding the business has so much momentum, as measured by earnings and market share. “Why would you disrupt that right now?”
Those two views might never get reconciled. Mr. Tyra says he’s open to talking about everything he’s done with anyone who asks. Browning West’s founders, who met Mr. Tyra last week via videoconference, say they’re looking for answers about his performance that he seems unable to provide. Mr. Tyra’s time as Broder Bros. CEO is also under scrutiny by investors.
“I don’t have any major expectations out of any of the meetings to try to get them off course,” the Gildan CEO says of the shareholders who oppose his nomination. “[But] I’ve had preconceived notions on things in my life where I’ve changed my mind with facts. We’ll see if that happens here.”
The bottom line is that he and shareholders are aligned on the desire to create more value, he says. “If you have the same goal in mind, you can work through the personal nuances.”
Mr. Tyra says he’s moving ahead with the full conviction that he’ll remain as the CEO. He’s buying a condo in Montreal, where Gildan is based. And he says he’s arranged to work with a tutor to learn the basics of French. He’s encouraging Gildan employees to focus on their work, as he’s doing. “I’m not in tune with the day-to-day noise that’s going on,” he says. “I’m not saying I don’t get emotional about some things myself. But not often.”
The conflict that has erupted over the CEO switch is “disappointing,” Mr. Tyra concludes. “I could foresee a much better transition with Glenn and I. I could see having a scotch and a cigar again. But that’s not where we are today.”
Nicolas Van Praet
Andrew Willis