Browning West Urges Gildan Activewear's Board of Directors to Promptly Answer Questions Related to Apparent Diligence Failures During Its CEO Search
Browning West, LP (together with its affiliates, "Browning West" or "we"), which is a long-term shareholder of Gildan Activewear Inc. (NYSE: GIL) (TSX: GIL) ("Gildan" or the "Company") and beneficially owns approximately 5.0% of the Company's outstanding shares, today urged the Company's Board of Directors (the "Board") to promptly answer questions regarding its apparent diligence failures during the process that led to Vincent Tyra's appointment as Chief Executive Officer ("CEO").
As part of standard due diligence, Browning West conducts thorough research pertaining to the track records of CEOs of our portfolio companies. Our research related to Mr. Tyra has revealed a clear track record of value destruction. Nonetheless, we met with Mr. Tyra and Ms. Maryse Bertrand, Chair of the Corporate Governance and Social Responsibility Committee, on Friday, February 2 to better understand why the Board deems him qualified to serve as Gildan's CEO. We ultimately left the meeting with more questions than answers due to Mr. Tyra's and Ms. Bertrand's inability to address our concerns pertaining to poor financial results at Fruit of the Loom Inc. ("Fruit of the Loom") and Broder Brothers Co. ("Broder Bros.") while Mr. Tyra served in leadership roles at each company. Following our meeting, we wrote to Ms. Shirley Cunningham, Chair of the Compensation and Human Resources Committee, requesting a call to understand how this committee conducted diligence into Mr. Tyra's record. Unfortunately, we have yet to hear back from Ms. Cunningham, despite the fact that this committee is directly responsible for CEO succession.
Both our research based on public information and our conversation with Mr. Tyra reveal a record of value destruction. These findings stand in stark contrast to the Board's numerous public statements about its apparently well-governed CEO succession process and exhaustive vetting of Mr. Tyra, which forces us to question whether the Board properly exercised its duty of care when carrying out its most important responsibility. We suspect many other Gildan shareholders share our concerns. In our view, the Board owes it to shareholders to promptly address the following questions via a public disclosure, so the Board's diligence process can be properly evaluated:
This press release is for informational purposes only and is not a solicitation of proxies. If Browning West determines to solicit proxies in respect of any meeting of shareholders of the Company, any such solicitation will be undertaken by way of an information circular or as otherwise permitted by applicable Canadian corporate and securities laws.
Disclaimer for Forward-Looking Information
Certain information in this news release may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking statements and information generally can be identified by the use of forward-looking terminology such as "outlook," "objective," "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "plans," "continue," or similar expressions suggesting future outcomes or events. Forward-looking information in this news release may include, but is not limited to, statements of Browning West regarding (i) how Browning West intends to exercise its legal rights as a shareholder of the Company, and (ii) its plans to make changes at the Board and management of the Company.
Although Browning West believes that the expectations reflected in any such forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, the risks that (i) the Company may use tactics to thwart the rights of Browning West as a shareholder and (ii) the actions being proposed and the changes being demanded by Browning West, may not take place for any reason whatsoever. Except as required by law, Browning West does not intend to update these forward-looking statements.
Olshan Frome Wolosky LLP is serving as legal counsel, Goodmans LLP is serving as Canadian legal counsel, and IMK is serving as Quebec legal counsel. Longacre Square Partners is serving as strategic advisor and Pelican PR is serving as public relations advisor. Carson Proxy is serving as proxy advisor.
About Browning West, LP
Browning West is an independent investment partnership based in Los Angeles, California. The partnership employs a concentrated, long-term, and fundamental approach to investing and focuses primarily on investments in North America and Western Europe.
Browning West seeks to identify and invest in a limited number of high-quality businesses and to hold these investments for multiple years. Backed by a select group of leading foundations, family offices, and university endowments, Browning West's unique capital base allows it to focus on long-term value creation at its portfolio companies.