MONTREAL - The founder and CEO of Gildan Activewear will enjoy another large windfall after deciding to sell 14 per cent of his stake in the company over then next 11 months, his third such divestiture in recent years.
The Montreal-based company said Monday that a U.S. financial institution will sell up to one million shares held by Glenn Chamandy beginning March 10 as part of a pre-arranged share disposition plan.
Once completed, Chamandy will remain one of Gildan's largest investors, with more than six million shares or about five per cent of the company's equity.
"Mr. Chamandy is simply rebalancing his investments....he's committed to the company, he continues to believe in our future growth prospects and he's committed to leading us to a successful execution of the next phase in our growth strategy," Sophie Argiriou, vice-president, investor communications, said in an interview.
Gildan's (TSX:GIL) (NYSE:GIL) shares closed Friday at US$52.40 on the New York Stock Exchange, putting the current value of the shares at around US$52 million.
Argiriou said the shares being sold were part of the original shares Chamandy owned when the maker of T-shirts, socks, underwear and the like went public in 1998.
"Since the company went public, the shares have gone up 60 times (in value) so definitely there is a profit in there," she said.
The selling prices will be disclosed in insider reports filed with regulators.
Under U.S. and Canadian securities laws, company insiders can sell shares over a predetermined period of time and subject to predetermined volume and price parameters.
The plan can only be established when the insider is not in possession of material non-public information.
The share plan was disclosed nearly two weeks after the company reported that its first-quarter profits grew 18.1 per cent to a record US$41.7 million.
Gildan said it expects strong profit growth into the 2015 fiscal year despite higher cotton costs and a continuing soft retail market. The company said it still expects adjusted earnings will increase by up to 15 per cent and sales will surpass US$2.3 billion this year after reporting a strong start to the fiscal year.
Once a plan is established, Chamandy will have no discretion over sales under the plan.
In August 2012, Gildan announced that Chamandy planned to sell up to 2.75 million shares, or 28 per cent of his holdings at the time. In 2007, he sold 3.6 million shares at an average price of $37 for diversification and estate planning purposes.
Gildan is a leading supplier of apparel, including T-shirts, fleece, sport shirts, socks and underwear. It sells products under the Gildan, Gold Toe and Anvil brands, and has licensing arrangements with Armour, Mossy Oak and New Balance brands. Its manufacturing facilities in Central America, the Caribbean and Bangladesh employ more than 34,000 workers.
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