Gildan CEO lays out growth strategy
Fighting an activist shareholder’s push to oust him, Gildan Activewear Inc. chief executive Vince Tyra says he’ll boost the clothing manufacturer’s profit with a credible plan that includes reviving the American Apparel brand and expanding deeper into overseas markets.
Tyra was appointed in December after the board dismissed longtime CEO Glenn Chamandy following a disagreement over Gildan’s direction. Since then, investment manager Browning West LP has led a campaign to replace the majority of the board, dump Tyra and reinstate Chamandy — a plan that shareholders owning about a third of the stock have publicly supported.
On Monday, Tyra made his case for staying.
“Our plan, it’s ambitious, it’s realistic and it’s credible,” he said. “It’s stuff that we are not just creating. We’re working on it today.”
Tyra set out several initiatives such as increasing brand awareness and reinvigorating “dormant” American Apparel. The lowcost clothing maker, which dominates North America’s printwear market, will also look to regain share in certain international markets, such as Germany.
“I’ve done low-cost marketing before, we’re not going to explode the budget,” Tyra said.
Browning West, which is based in Los Angeles and owns about five per cent of Gildan, last month released the operating plan it will implement if it wins the proxy fight. It aims to more than double earnings per share and boost the stock, which closed at US$35.33 on Monday, to more than US$100 by 2028. That strategy relies on cutting costs by expanding production in Bangladesh and boosting share buybacks.
Tyra’s response is the latest front in a battle for control of the company, but he didn’t share a stock-price target, declining to go into that level of detail amid the current “uncomfortable situation.”
The CEO’S plan projects annual growth in earnings per share in the “high-single to low-double-digit range.” The company’s projected rate of revenue growth is similar to Browning West’s.
To win employees’ support after an “iconic leader” such as Chamandy, Tyra said he’ll manage “through influence, and not control.” Browning West has described his track record as one of “value destruction,” citing his past roles at Fruit of the Loom Inc. and elsewhere.
“I read the false narratives,” Tyra said.
Neither Gildan nor Browning West’s publicly released plans suggest a merger or acquisition strategy. Bloomberg has reported that before being fired, Chamandy looked into acquiring two major apparel distributors valued at a total of more than US$3 billion.
Shareholders will vote on May 28 on who should represent them on the board, looking to revive growth at a firm with more than 40,000 employees and US$3 billion in sales.