Tough Questions At Marks & Spencer AGM
Published on Jul 9 2014 8:57 AM in Retail
Nearly 900 shareholders attended the Marks & Spencer AGM in Wembley Stadium on Tuesday, armed with plenty of questions for the top bosses. The Dutch CEO, Marc Bolland, former chief executive of Morrisons, came under particular fire.
There have been three years of falling profits for the company, and shareholders feel that the share price is stalling. The core general merchandise division, which includes clothing and other non-food sales, saw sales drop by 1.5 per cent for the 13 weeks to 28 June, despite the fact that there has been a slight increase in womenswear sales. This is the 12th consecutive year of falling sales for clothing overall.
A massive bone of contention is the new £150-million website. Although sales have been improving for womenswear, there has been an 8-per-cent fall in online sales. M&S homewares were hit particularly hard, as about a third of these sales are online. Customers are finding it difficult to navigate the new-look website, and also had to re-register to use it. Only about half of the six million shoppers who used M&S's old website have registered for the new site, however, finance director Alan Stewart said that they expected early teething troubles, and that the website would be back on track before the busy Christmas periods of November and December.
Bolland did concede that the company's sales performance in clothing and homewares is not good enough. One shareholder was keen to point out his failures, saying, “You are a bread-and-butter and baked-beans expert. That’s your forte. Clothing is not.”
Robert Swannell, chairman of M&S, said that the company would soon see the benefits of several years of investment and that Bolland still has his support.
One piece of good news for M&S is that shareholders seemed to be happy with the style direction that M&S is taking, and that one in five British men now wear M&S slippers.
There was more good news for the food retail side of the business, which saw sales increase by 1.7 per cent and helped increase the total UK sales by 0.3 per cent. This is the 16th consecutive quarter of increasing food sales, significantly higher than the major supermarkets, which are battling the rise of the discount chains. M&S also revealed that it is planning to open more Simply Food stores and, interestingly, that the location of its most popular bakery last year was in Paris.
Despite the mixed news and murmurings, all resolutions put to the shareholders were voted through, including the remuneration report and re-election of directors, although some voted against chief executive Bolland.
Swannell stated that M&S "has a plan and is on track to fulfil it", adding that "Food is ahead of plan."
© 2014 European Supermarket Magazine by Nicole Gernon
To sign up to ESM’s weekly e-zine newsletter, send an email with the subject ‘Subscribe ESM news’ to email@example.com.