Research Notes: Gildan Goes Big

A successful proxy fight means GIL will no longer be dead money

Highlights:

• The stunning firing of Gildan’s CEO in December boomeranged quickly: a successful proxy battle led to the removal of the entire board, and the CEO’s reinstatement.

• The recent history of GIL — including ten years of relatively sharp underperformance — raises questions of why major shareholders fought the termination so aggressively.

• Yet the longer-term history, and the struggles of peers, suggest Gildan may, again, have the right man for the job.

• An aggressive plan seems likely going forward. After years of being mostly dead money, GIL is going to move. The question is whether management’s leveraged bet pays off.