T-shirt giant Gildan’s new CEO rocked by allegations of affair with underling: sources

One of the world’s largest apparel makers says new blemishes have surfaced in its CEO appointment, disrupting a succession battle sparked by activist investors seeking the reinstatement of the ousted president, The Post says. reported.

Gildan Activewear, a Montreal-based T-shirt wholesaler with a market capitalization of approximately $6 billion, ousted co-founder Glen Chamandy Last December, the company named veteran executive Vince Tyra to replace him.

But an investigative firm’s report reviewed and compiled by the Post alleges that Tyra had an affair more than 20 years ago with an employee who reported to her at another company. He currently holds a senior executive position at Gildan. .

California-based hedge fund Browning West and other major shareholders are currently The company had called for the removal of five directors after Chamandi was fired in December, but before the affair allegations were reported.alleging that Gildan’s board failed to do due diligence before hiring Tyra, and that reuniting with the alleged former mistress could create legal problems down the road, the people said. Ta.

“If the CEO acts like this again, we’re going to get Me Tooed. That’s not good for us,” a shareholder with a large stake in Gildan told the Post. Ta.

Vince Tyra allegedly had an affair with a subordinate while running Broder Brothers, according to a report by a research firm. Icon Sports Wire (via Getty Images)

The allegations were discovered by Paragon Intel. The company sells annual subscriptions to about 100 annual reports to investment firms for as much as $75,000.

The 33-page initial background investigation report alleges that Tyra had a confidential relationship with a subordinate between 2000 and 2005, when he was CEO of Broder Brothers, Gildan’s distributor. The person is named in the book, but the Post said after reviewing the document it decided not to identify him. .

The only report currently in circulation is a live interview, and Paragon is expected to release the final version in the coming weeks, which will include whether Tyra should be removed, Chamandi should be reinstated, or if both should be managed. I plan to express my opinion on whether this should be done.

Sources close to Gildan decried the mudslinging by disgruntled activist investors, who said the motive was to influence shareholder votes at the company’s annual general meeting scheduled for May 28. claimed to be the purpose.

Some Gildan shareholders want Glen Chamandy to return as CEO. Gildan

“This false story is a reprehensible attack by Mr. Browning West, Mr. Glenn Chamandy, and their cronies to undermine two good people in order to win a proxy fight. There was no affair. Tyra dated a colleague for less than three months 22 years ago. At the time, he was separated and she was divorced. A new number of activists are pushing this story forward. It has reached its lowest level,” the source said.

“Shareholders and director nominees who have followed Browning West’s attempts to take over Gildan and its board of directors should wonder how they can deal with activists promoting this type of abhorrent character assassination. Browning West’s own investors should be ashamed of this behavior.”

Browning West and Chamandi declined to comment.

Sources close to Gildan told the Post that Tyra, 58, who is married with five children, was living separately at the time of the alleged affair. According to sources, her subordinate was divorced at the time the two started dating.

The source went on to point out that there would be two layers of management between Tyra and her ex-girlfriend, who had a consensual relationship with a current Gildan employee more than 20 years ago. He also pointed out that there is no policy that would prevent the company from hiring someone based on this. .

Nevertheless, corporate governance experts said it was natural for their relationship to be raised as part of a broader review of whether Tyra should have been hired, but that The fact that the incident allegedly occurred more than 20 years ago “makes this issue even more of a gray area,” he said. ”

Gildan also makes T-shirts at this factory in Honduras, which competes with Hanes. Gildan

Doug Chia, president of Soundboard Governance, told the Post, “Time makes a difference and it’s not black and white.”

“In today’s day and age, you have to think about the history of inappropriate relationships. People will look back on him and hold him to today’s standards.”

“You might hope the board knows about this and considers it,” added Chia, who is not involved in the Gildan fight.

Mr. Tyra and Mr. Gildan’s board of directors, led by Donald Berg, had no comment.

Chamandi has known Tyra for 30 years, co-founding the company with his brother in 1984 and serving as sole CEO since 2004.

Gildan’s board had said it wanted to withdraw from Chamandi. Because he was trying to make a big acquisition. It will harm the company. He also wanted to play a bigger role in choosing his successor.

Chamandi acted like Gildan was its own business and had no respect for its directors, one of Gildan’s major shareholders told the Post.

Gildan’s Bread and Butter has the lowest prices on T-shirts. Amazon

“This has become an ego issue,” the source said.

Chamandi referred to a statement he made on Jan. 9 to the Post.

“I am extremely disappointed in the actions of the Gildan board,” he said at the time. “Having been at the helm of Gildan for over 20 years, I am deeply outraged by what appears to be a premeditated effort to tarnish my record in public, and even worse from a corporate perspective. In particular, their careless actions may also be damaging the reputation of a great company. ”

“The board’s self-serving motives aimed at distracting from its own recklessness have led it to lose sight of what really matters: the best interests of the company, its employees, customers, and shareholders.”

Gildan analysts said the board was well within its rights to fire Chamandi because the company has underperformed in recent years.

“I don’t think Mr. Chamandi’s track record warrants this kind of response to put him back in place,” said the analyst, who requested anonymity to speak freely about the company.

“But I think investors felt blindsided by this announcement. It was so sudden. There was a natural connection between many of them and Glenn, and the board made sure that all communication regarding this change was processed incorrectly.”

Tyra and former Knicks coach Rick Pitino fought with each other and eventually reached a settlement. AP

According to the company’s financial report last month, Gildan’s sales last year were $3.2 billion, down 1.4% from 2022. Net income was $533.6 million, down 1.5% from 2022.

According to an analyst report attached to Gildan’s Feb. 21 earnings report, Tyra doesn’t appear to have any major plans to change Charmandy’s growth strategy.

“New CEO Vince Tyra has been on the job for just a month and has signaled an updated strategy that will likely be announced at an investor presentation in the coming months,” the report said.

“But he has made it clear that he aims to strengthen, not change.” [Chamandy’s] A sustainable growth strategy, increased marketing spend, and M&A were not part of the plan. We believe this will bring a sigh of relief to a market that has been gaining support for the pillars of the Back To Basics platform. ”

Meanwhile, Berg is unfazed by any allegations of wrongdoing involving Tyra, telling investors that Paragon’s report was commissioned by one of its activist shareholders, the people said. told the Post.

Paragon denied Berg’s claims.

“No one was paying us to run the report. We identified this situation because there was an external CEO change,” said Paragon CEO Ty Popplewell. “We are not an opposition research firm.”

Paragon spoke to several former Broder executives who claimed to know about Tyra’s relationship with current Gildan executives.

“He started dating this woman in the office. It was, what was it? He was the CEO, so we agreed to it. What do we do?” one former Broder executive told the Post. said in a heavily redacted version of the report reviewed.

Another said, “I’ve never been around people with such a lack of ethics and morals.”

Apart from the office romance, activist shareholders also question Tyra’s business acumen. He was president of Fruit of the Loom when it declared bankruptcy in 1999, then moved to Broder Brothers.

Bain Capital, which owned Broder, forced Tyra out in 2005 due to poor business performance, Broder officials told the Post.

Tyra then left the corporate world to become the athletic director at the University of Louisville in 2017.

That same year, the university’s Board of Regents fired legendary coach Rick Pitino over a paid recruiting scandal.

Pitino, who coached the Knicks to NCAA titles at the University of Kentucky and the University of Louisville, transferred to Iona College and then took over at St. John’s University last fall.

Tyra, a Louisville native, dropped out of college in 2021. The following year, he was hired as senior vice president of corporate strategy, mergers and acquisitions at Kentucky-based Houchens Industries before being hired by Gildan.