Gildan board abruptly resigns, hands control to activist and founder

Gildan Sportswear said Thursday that its entire 12-person board of directors would immediately resign in favor of the eight nominees nominated by activist Browning West, abruptly ending a contentious proxy battle and restoring the former CEO Glenn Chamandy at the company he founded.

Browning West and a significant number of Gildan shareholders fought to bring Chamandy back as CEO after he was ousted in December in favor of Vince Tyra, who had been recruited by Houchens Industries. The activist company later claimed that Gildan’s board showed “total disregard for sound corporate governance.”

This is the second mass resignation from the board after five directors resigned earlier this year as part of a “board refresh”.

The last time an entire board resigned over an activist battle was in 2012, when the Canadian Pacific board gave way to Pershing Square founder Bill Ackman, a few hours before the railroad’s annual meeting.

“We are deeply grateful for the outpouring of support that Browning West’s listing and plan have received from our fellow shareholders, Gildan employees and leading proxy advisory firms,” said Usman Nabi and Peter Lee of Browning West in a statement.

Headquartered in Montreal, Gildan is a supplier to major U.S. retailers and companies, including Amazon And Target. Under Chamandy’s leadership, the company attempted to improve its overseas operations, with a focus on margins and expenses.

Los Angeles-based Browning West accused Gildan’s board of directors of leaking to the media an allegedly nonexistent sales process and hiring private investigators to investigate one of the company’s candidates. Gildan accused Chamandy of mismanagement and said Tyra was the ideal candidate to lead the company to the next stage. The company spent nearly $30 million on advisers to fend off the activist investor.

Michael Kneeland, former CEO of United Rentals, will become president of Gildan. The other seven directors, including Chamandy, should soon take up their duties. Other major shareholders, including Anson Funds and Janus Henderson, have supported Browning West’s efforts. The activist also gained the full support of proxy advisors Glass Lewis and ISS.

“I am extremely excited to return as CEO of Gildan and am pleased with the incredible support I have received from shareholders and employees over the past six months,” Chamandy said in a statement.