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The company that supplies the T-shirts for your work off-sites is at the centre of a power struggle filled with almost as much corporate drama as a Succession episode.
Driving the news: Canadian clothing manufacturer Gildan claimed that Browning West — a U.S. hedge fund leading the charge to bring back ousted Gildan CEO Glenn Chamandy — illegally acquired additional shares in the company by failing to follow U.S. regulatory laws.
Why it matters: Go into your closet and look through your T-shirts. Odds are, you’ll find at least one from Gildan. In producing roughly 1.2 billion shirts a year, the company dominates the market for low-cost, basic apparel that Etsy sellers and bands throw their artwork on.
Catch-up: Back in December, Gildan’s board sacked Chamandy, claiming the co-founder put forward an aggressive expansion plan that he failed to prove was viable. Chamandy allegedly gave the board the ultimatum of enacting the plan or firing him. It chose the latter.
- Later, Gildan gave more justifications, claiming Chamandy was totally checked out — scarcely coming into the office, holding meetings, or sending work emails.
- Some investors want Chamandy back and the board removed. These investors also disagreed with the appointment of Vincent Tyra as the new CEO.
Zoom out: By law, investors with over 5% of a firm’s shares can call a special meeting to discuss matters like board removals. Browning West quickly gobbled up shares to meet this threshold. In doing so, Gildan claims the hedge fund failed to make a proper regulatory filing and violated a U.S. antitrust law.
- Browning West denied any inappropriate actions and said that Gildan’s board was engaging in “desperate and egregious” actions to try and hold on to power.
Big picture: Since announcing Chamandy’s dismissal, Gildan’s shares have fallen by ~13%, and its market cap has shrunk by ~$1 billion. If this saga drags on, it could seriously hurt the company at a time when demand for its products appears to be slipping.—QH