The Misfits: Gildan Activewear (GIL)

An unconventional wealth generator in apparel caught in the storm of a proxy battle.

Tisserand (Weaver), Vincent Van Gogh, 1884, oil on canvas (Museum of Fine Arts Boston)

No one should ever come to me for advice on anything trendy, whether it be fashion or investing in fashion. The consumer products I would go to the mat for tend to be some of the worst consumer goods investments. Two examples are Blue Nile – an online jewelry retailer – and Blue Apron – a meal delivery service. Both companies struggled mightily and were eventually taken private at prices well below their IPO prices, but were both products and experiences I fell in love with.

Fortunately, most trendy businesses have companies working behind them, and it doesn’t take a trend-spotter to identify them. These companies often don’t get much investor attention and can generate stell value.

One such company is Gildan Activewear (NYSE: GIL). While you may recognize the brand’s t-shirt and underwear offerings, the business stretches far beyond that. It is also a clothing manufacturer that has run laps around the broader market and many of the more popular name brands adored by consumers and investors. 

Gildan is a company that has come across my radar several times, but even by my standards, there wasn’t much on the bone when the time came to discuss it. That has changed recently as the company is in an ugly and public proxy fight between its board, its recently ousted CEO, and some of its largest shareholders.

So, let’s dig into what makes Gildan a superior business to so many other clothing brands, what is happening with this proxy battle, and whether a company in the midst of a mud fight can be a worthwhile investment.

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