The former Goldman Sachs executive who’s taking over as board chair at Gildan Activewear Inc. called for an end to the shareholder rebellion that has left the clothing company’s future in limbo.

“We need the egos and the drama-seekers to get away so we can get on with creating value,” Tim Hodgson, who was announced as the new leader of Gildan’s board on Monday, said in an interview.  

Gildan is one of the world’s largest makers of cheap T-shirts, the owner of the American Apparel brand and a supplier to Walmart Inc. and Nike Inc. But the Canadian company has been embroiled for months in a bitter fight with several of its largest investors over who should be in charge in the boardroom and the chief executive officer’s suite. 

Hodgson will have to contend with Los Angeles-based investment firm Browning West LP, which is campaigning to install eight new directors and to bring back longtime CEO Glenn Chamandy, who was fired in December after disagreements about the company’s strategy. 

On Monday, Gildan’s board appeared to seek a way out of a battle it may be losing. The company announced that seven out of its 12 directors will leave on their own — including Chair Donald Berg, who will be replaced by Hodgson on May 1. 

However, Browning West said it’s continuing with its proxy fight and will try to elect its full slate of nominees to the board at a shareholder meeting next month. And the firm doesn’t want Vince Tyra, the former Fruit of the Loom executive who replaced Chamandy as CEO, to stay. 

‘End the Drama’

Hodgson, who ran Goldman’s Canadian unit until 2010, is now the chair at Hydro One Ltd., an electrical utility in Ontario that had its own governance turmoil when its CEO and board resigned in 2018, under pressure from the provincial government.

“This isn’t my first rodeo,” said Hodgson, who criticized Browning West’s activist campaigns as “burning through CEOs like knife through butter.” 

“What we need to do is get back to selling T-shirts and not selling newspapers. Let’s end the drama,” he said.  

The current fracas began last fall when the board terminated Chamandy, the only CEO many Gildan employees have ever known. Bloomberg News has reported that before being fired, Chamandy looked into acquiring two major apparel distributors valued at a total of more than US$3 billion — a strategy the board disagreed with. He also locked horns with Gildan directors over succession planning. 

Hodgson said he fully supports the board’s actions so far, and that Chamandy needed to go. “I’ve been through 10 CEO succession processes,” he said. “Founder successions are often really complicated because founders are tied up in an ego way like no other type of CEO. And quite frankly, I think it got in the way here.” Gildan was founded by Glenn Chamandy’s grandfather. 

Gildan’s board also launched a strategic review that could lead to a sale — and hired Goldman for advice — after receiving an expression of interest from a potential buyer. When asked if he’s there to sell or grow the company, Hodgson said he took the job to “create value for shareholders, whichever way is the best value-creation opportunity.” 

The company said Monday it doesn’t expect to give an update on the review before the May 28 investor meeting, and the shares fell 1.2 per cent in Toronto. 

“We believe that today’s announcement was likely triggered by the collapse of the board’s reactive sale process, which it is clearly trying to bury in the 2,500+ word press release,” Browning West’s Peter Lee and Usman Nabi said in a statement.