Browning West Calls for Change at Gildan Activewear: A Letter to Shareholders

Introduction:

Browning West, LP, a significant long-term shareholder of Gildan Activewear Inc. (NYSE: GIL), has issued a compelling letter to shareholders. The letter announces Browning West's intention to requisition a Special Meeting of Gildan Shareholders, aiming to reconstitute the Board of Directors. The proposed slate includes five highly qualified individuals who will bring fresh perspectives and strong governance skills to the company.

The Need for Change:

Browning West expresses concern over the Board's mishandled CEO succession, which resulted in the termination of Gildan's long-time CEO and Co-Founder, Glenn Chamandy. Since then, the company's stock performance has underperformed significantly, implying more than $1 billion USD in value destruction. Furthermore, the Board has ignored the feedback of nine separate investors who collectively hold over 35% of Gildan's outstanding shares. The lack of confidence in the current Board calls for the need for better judgment and new perspectives.

The Proposed Slate:

Browning West has meticulously selected five highly qualified individuals to reconstitute Gildan's Board of Directors:

1. Michael Kneeland: The former CEO and Chair of United Rentals, Inc., a renowned leader with an exceptional record of value creation in a large and operationally complex business. Mr. Kneeland's experience in overseeing successful CEO succession processes and working with founders of highly successful businesses is highly relevant given the mishandled CEO succession at Gildan.

2. Glenn Chamandy: The Co-Founder and former CEO of Gildan himself, with a strong record of value creation and an unrivaled understanding of Gildan's low-cost vertically integrated apparel manufacturing business model. Mr. Chamandy's experience in leading a complex global business is invaluable.

3. Peter Lee: The Co-Founder and Partner of Browning West, possesses extensive financial and capital allocation acumen. Mr. Lee has experience in leading public company CEO searches and brings substantial alignment with shareholders as one of Gildan's largest long-term shareholders.

4. Karen Stuckey: A former Senior Vice President at Walmart Inc., Ms. Stuckey has extensive experience in the apparel industry and has led large-scale businesses with an international presence. Her expertise in operating within a low-cost business model is highly relevant to Gildan.

5. J.P. Towner: The former Chief Financial Officer of Dollarama Inc. and the current Chief Financial Officer of RONA inc. Mr. Towner brings extensive experience in working with low-cost vertically integrated businesses focused on value-oriented consumer products. His track record of delivering strong financial results is a valuable asset.

The Case for Change:

Browning West makes a compelling case for the need for change in Gildan's boardroom. The incumbent directors' actions have destroyed value for shareholders and introduced significant business risk. The abrupt termination of Mr. Chamandy as CEO without cause, the appointment of Mr. Tyra as CEO despite his track record of value destruction, and the Board's disregard for shareholder feedback in the CEO succession process are all examples of the Board's failure to act in the best interest of the company.

The Proposed Actions:

If the Special Meeting is successful and the newly reconstituted Board is formed, Browning West expects immediate action to be taken. The proposed actions include appointing Mr. Kneeland as independent, non-executive Chair, terminating Mr. Tyra's employment, and appointing Mr. Chamandy as CEO. The reconstituted Board will also reassess committee composition and reassign committee chair roles.

Importance of the Special Meeting:

The Special Meeting will serve as a referendum on the Board's actions and provide an opportunity for shareholders to voice their concerns. The election of the proposed slate will ensure that the collective interests of Gildan shareholders are protected now and in the long term.

Conclusion:

Browning West's letter to Gildan Activewear shareholders highlights the urgent need for change in the company's boardroom. The proposed slate of highly qualified individuals brings a wealth of experience and expertise that will drive value creation and establish the highest quality governance in Gildan's history. Shareholders now have an opportunity to vote for a new direction for the company and ensure their interests are protected.