Gildan’s ex-CEO lambastes possible sale: If reinstated to his post, Glenn Chamandy, a former chief executive officer of Gildan Activewear Inc., has proposed a bold plan to more than double the apparel manufacturer’s earnings by the year 2028. As Bloomberg notes, Chamandy’s proposal goes against the current course of action supported by the board, who are reportedly considering selling the company to the highest bidder.

After being removed from office in December due to differences with the board over succession planning, Chamandy now supports a strategy that involves increasing borrowing, speeding up stock buybacks, and avoiding massive acquisitions. Increasing the stock price from its current $37.13 to $60 by year’s end and $100 within five years is the main goal, along with speeding up earnings per share growth.

The proposed return of Chamandy, however, is contingent upon an election to replace the current board of directors of Gildan, which is spearheaded by the Los Angeles-based investment group Browning West LP, which owns a 5% interest in the corporation. Around one-third of Gildan’s stockholders have spoken out in favour of Chamandy’s reappointment.

The upcoming shareholder vote on May 28 gives Browning West and Chamandy’s supporters a chance to take charge. However, the board is determined and has begun talks with possible purchasers, assisted by investment firms like Goldman Sachs, in response to an unsolicited interest statement from a non-disclosed organization.

A company known for its reasonably priced casual wear is at the centre of this boardroom dispute. Gildan today owns the legendary American Apparel brand and has grown into one of the biggest blank T-shirt producers in the world, supplying well-known companies like Nike Inc. and Walmart Inc. It is a prominent participant in the Canadian consumer goods manufacturing sector, with a market capitalization of around $6.3 billion.

Shares of the company fell by more than 10% after Chamandy’s unexpected resignation in December, at the age of 62, stunned the market. His grandparents started the company in 1946, and he says his devotion to creating value and making sure there’s a smooth transfer shows that.

Allegations of disengagement, resistance to following agreed-upon succession plans, and a willingness to pursue a risky acquisition strategy led to the board’s decision to dismiss Chamandy. The answer from Chamandy, Browning West, and a lineup of potential directors includes industry heavyweights like Nike, Canadian National Railway Co., United Rentals Inc., Walmart, and United Rentals Inc.

With this plan in place, we expect net sales to reach $4.3 billion by 2028, up 34% from 2017 levels, and improved margins to bring in $956 million in adjusted operating profit. According to Chamandy, the board’s desire to sell the company is driven by a lack of accountability. They are worried that an acquisition financed by excessive debt could harm the company’s competitive advantage and long-term sustainability.

The global reach of Gildan, with its 43,000 employees, highlights its supremacy in the printwear market, especially when it comes to T-shirts that can be customized with logos or designs. Working with Browning West, Chamandy has presented a strategy that involves moving production to Bangladesh, a country with cheaper energy and labour costs compared to Honduras and other high-cost areas.

The firm also plans to take advantage of premium market expansion potential by selling fleece goods and clothing made from high-quality textiles under labels like Comfort Colours and American Apparel.

While there are some similarities to his prior tenure, Chamandy has brought a fresh approach with his strategy, which includes enhanced leverage for share buybacks. During a recent conference call with investors, new CEO Vince Tyra—formerly of Fruit of the Loom—emphasized continuity with existing plans, despite the fact that this change has triggered debate within the company.

But Browning West is still confident in Chamandy’s leadership abilities and thinks he’s the right guy to carry out the plan. In an effort to set the record straight, Chamandy denies rumours of a tight association with Tyra and stresses that they have had very little communication over the last 25 years.

Shareholders are waiting for the results of the upcoming vote, which might determine Gildan Activewear Inc.’s destiny, as the conflict between Chamandy’s supporters and the current board grows.