Browning West Cautions Shareholders Regarding Gildan Activewear’s Risky Path Forward Under CEO Vince Tyra

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 issued the following statement regarding the Company’s April 15^th investor update.

As a reminder, Browning West is seeking to elect eight highly qualified and independent director candidates to Gildan’s Board of Directors (the “Board”) at the Annual Meeting of Shareholders on May 28, 2024. Browning West’s director candidates possess strong track records of value creation, expertise in successful succession planning, relevant industry and governance experience, as well as proven management and board service pedigrees in Canada and the U.S.

“Browning West believes that Vince Tyra’s ‘new plan’ raises troubling questions about the current Board’s stewardship of the Company and confirms our fears that Mr. Tyra may lead Gildan down a similar destructive path as the ones he did at the helm of Fruit of the Loom Inc. and Broder Brothers Co.

Our key questions are outlined below:

1. Why Should Shareholders Allow Mr. Tyra, an Executive With a Record of Failure, to Pursue the Same Strategy as Glenn Chamandy, Who Has a Long Record of Success?
   
   Mr. Tyra’s ‘plan’ is clearly nothing more than a continuation of the Gildan Sustainable Growth (“GSG”) strategy, which Mr. Chamandy launched in 2022. In fact, the GSG strategy was positively referenced 14 times across Mr. Tyra’s presentation materials and his own statements. We appreciate that the Board is finally reversing its prior, baffling criticism of Mr. Chamandy’s growth strategy and acknowledging that he established the best strategy and foundation for the Company. But why should shareholders allow a proven value-destroyer like Mr. Tyra to attempt to deliver this strategy when proven value creator Mr. Chamandy is available and excited to execute the plan he designed?
   
2. Why is Mr. Tyra Giving Himself Room to Reduce Margins When the Company Has Margin Tailwinds?
   
   Mr. Tyra gives himself room to reduce operating margins by 200 basis points from the current 20% level he inherited from Mr. Chamandy, whereas the Browning West slate’s plan seeks to increase operating margins by over 200 basis points from current levels. This is highly concerning because while our plan reflects the opportunity to improve margins by shifting to higher-margin products and lower-cost production facilities in Bangladesh, Mr. Tyra’s plan does not appear to capitalize on these opportunities. However, we are not surprised to see underwhelming margin guidance from Mr. Tyra because we observe significant margin degradation in his track record at both Fruit of the Loom and Broder Bros.