Gildan Activewear Board of Directors Issues Open Letter to Shareholders and Sets Record Straight on Browning West’s Misguided Campaign to Reinstall Former Gildan CEO - Seite 2

Against that backdrop it was striking to read Browning West’s letter of December 14^th asserting that under Mr. Chamandy’s leadership Gildan’s share price was “poised to be worth $60 to $80 a share over the next two years.” That claim is in sharp contrast to Mr. Chamandy’s 2023 long-range planning (LRP) presentation to the Board on October 30, 2023 in which he stated that organic growth would be capped with an intrinsic value of the share price significantly lower than the range quoted by Browning West.

Mr. Chamandy was chief executive for 20 years, and, in his last few years he gradually became more disengaged as CEO as he increasingly focused on outside personal pursuits including the development of a golf resort in Barbados. His management style was unstructured, with few senior leadership meetings, and he was rarely in the office, averaging just a few days a month even long after the end of the Covid shutdown. Mr. Chamandy never visited the new Gildan manufacturing plant in Bangladesh, one of our most significant investments. In fact, he had not traveled to Bangladesh, an important manufacturing hub for the company, in more than a decade.

High-Risk Acquisition and Succession Proposal

In December 2021, the Board and Mr. Chamandy agreed to an orderly 3-year succession plan. By the fall of 2023, however, Mr. Chamandy moved to entrench himself as CEO. As the search for a new CEO advanced according to the process and timeline agreed upon with Mr. Chamandy, he presented the Board with a plan to make risky and highly dilutive multi-billion-dollar acquisitions, arguing that he would then need to remain as CEO for several more years to oversee the integration. This was not, as Mr. Chamandy now claims, a routine annual strategy exercise. This was a formal strategy proposal presented as Mr. Chamandy’s best idea for addressing what he viewed as Gildan’s limited growth potential.

The Board was dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal. The Board asked Mr. Chamandy to provide a thorough analysis on his plan, including risks and mitigation. Instead of providing details on his plan, Mr. Chamandy gave the Board a simple and clear ultimatum: Either support his acquisition strategy and resulting succession plan, or he would immediately leave and sell his stock.