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New Gildan CEO Vince Tyra updates investors on priorities amid leadership battle

MONTREAL — Gildan Activewear Inc.’s new CEO Vince Tyra gave an update to investors three months into his time leading the company as shareholder infighting over his hiring continues.

MONTREAL — Gildan Activewear Inc.’s new CEO Vince Tyra gave an update to investors three months into his time leading the company as shareholder infighting over his hiring continues.

Tyra outlined his strategic priorities for the company, with a focus on driving growth at the Montreal-based clothing manufacturer. 

His priorities include strengthening Gildan's market position and brand awareness, and growing the company's market share internationally. 

"I believe we are starting a new and exciting era at Gildan," said Tyra. 

Gildan has been embroiled in controversy ever since it announced that long-time CEO and co-founder Glenn Chamandy was being replaced by Tyra. The company has said Chamandy had no credible long-term strategy and had lost the board’s confidence. 

But several of the company’s investors have criticized the company for the move and are calling for Chamandy’s return. 

Those investors include the company’s largest shareholder, Jarislowsky Fraser, which as of the end of 2023 owned 7.05 per cent of Gildan shares. 

Other investors calling for change at Gildan include Browning West, which as of April 1 had 5.12 per cent; and Turtle Creek Asset Management, which had 2.56 per cent at the end of 2023. 

Earlier in April, Browning West released a plan to cut costs at Gildan and grow its market share. The plan would include shifting production of fashion basics products from Honduras to Bangladesh and using excess capacity in Honduras for fleece production.

Gildan said last month that it has formed a special committee of independent directors to consider a "non-binding expression of interest" from an unnamed potential purchaser and contact other potential bidders.

But Browning West and Turtle Creek have said the current board cannot be trusted to oversee a sale of the company.

In previous statements, Chamandy has defended his leadership at Gildan, and has said he presented a comprehensive long-range plan in October that showed meaningful growth prospects for Gildan over the next five years.

The company said it plans to hold an investor day in the fall to provide a comprehensive strategic plan. 

The clothing manufacturer saw profits rise in its fourth quarter to US$153.3 million, up from US$83.9 million a year earlier. 

Gildan reconfirmed its 2024 guidance in Monday's press release, with revenue growth expected to be flat to the low single-digits. 

Tyra said Gildan is on track with the first phase of its expansion in Bangladesh, a project that he said will enable the company to reduce costs, among other benefits.

One of his priorities is to successfully execute supply chain initiatives launched before his time as CEO.

"That includes delivering on Bangladesh, optimizing production in the Western Hemisphere and continuing to innovate our processes. These projects cannot be taken for granted," he said. 

While the U.S. continues to be Gildan's most significant market, Tyra said the company is not capturing its "fair share" in Europe. Over the past years, sales from outside the U.S. and Canada have made up between seven and 10 per cent of the company's total revenue, he said. 

"International markets were pursued opportunistically, often prioritizing available product to the U.S. and shorting international deliveries," he said.

Going forward, Tyra said he sees an opportunity to "double down" on certain regions. 

As part of that, he said it's important that Gildan considers local needs and tastes as it looks to grow its market share outside the U.S., prioritizing "surgical product introductions" over a "one-size-fits-all approach." 

This report by The Canadian Press was first published April 15, 2024.

Companies in this story: (TSX:GIL)

Rosa Saba, The Canadian Press