Sliding profits may have been on shareholders’ minds when they gathered for Marks & Spencer’s AGM yesterday, but many seemed just as concerned with the issues of plunging necklines and comfortable slippers.
Chairman Robert Swannell was given the task of handling a colourful array of questions from small investors after the retailer unveiled a 12th successive quarter of sliding sales in its general merchandise (GM) division. It was also the first AGM to be held since the group revealed its third year in a row of falling yearly profits.
But Mr Swannell appeared to win over many at the meeting at Wembley Stadium with a frank admission the group must do better.
“We have made it very clear, we didn’t meet our expectations — we are not trying to hide the fact. No bonuses were paid as a result of it.”
CEO Marc Bolland tried to woo the hall with the “stunning” revelation that Marks’s Paris bakery was its best performing in the world — comparing it to “bringing coals to Newcastle”.
But the former Morrisons boss, who has seen success in the retailer’s food division but disappointment in GM, was clearly not everyone’s cup of tea. One shareholder pointedly told him: “You are a bread and butter and baked beans expert. That’s your forte. Clothing is not.”
Style director Belinda Earl, who has the key job of making M&S’s clothing offer more attractive, made her presentation armed with a series of crowd-pleasing figures and pledges on a better range of sizes.
The former Jaeger boss talked up the “chic tailoring and sumptuous fabrics” now on offer. She also revealed that one in five men wore M&S slippers — which are now all to be fitted with special insulation to keep customers’ feet warm.
However, the company &heaped more frustration on shareholders by admitting teething problems with its new website meant online sales were down 8.1% in the 13 weeks to June 28. Its clothing and homeware division recorded its 12th quarter in a row of falling underlying sales — down 1.5% on a year ago.
Around 16% of its GM sales came through its website.
In M&S food halls, the department grew like-for-like sales by 1.7%. Total revenues for the period improved 2.3%. Profits have fallen for three years in a row and have just been over-taken by Next, although M&S is on track to meet City forecasts for a 2014 to 2015 pre-tax profit of £663m (€834m) up from £623m in 2013 to 2014.
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