M&S admits it missed goals at Wembley
London Briefing: retailer’s board tackled by shareholders at agm in London stadium
Marks & Spencer chief executive Marc Bolland addresses the retailer’s AGM at Wembley stadium yesterday. Photograph: Oliver Dixon/Imagewise/PA Wire
Shareholders in Marks & Spencer gathered at Wembley Stadium yesterday to air their views on the burning issues of the day, from comfy slippers to boring trouser ranges, too much chilli in the spaghetti bolognese and necklines that don’t provide enough cover for generous bosoms.
Shareholders were treated to presentations from the group’s fashion team, including the delights of the anti-crease technology used in its trousers and the fact that one in five British men wears M&S slippers. As for the food side, the group revealed that the location of its most popular bakery was in Paris.
Selling baguettes to the French is one thing, but it’s proving harder for M&S to sell to its core UK customer base.
Shareholders had pointed questions for the board on how much longer it would take to revive the business, with one likening it to “the slowest turn- around of a ship in history”.
Others accused the board of complacency but, given that M&S had earlier reported its 12th consecutive quarter of falling clothing sales, the assembled investors gave the board a surprisingly easy ride.
All resolutions put to shareholders were comfortably voted through, including the remuneration report and re-election of directors. There was a 4 per cent vote against chief executive Marc Bolland, although that hardly amounts to a shareholder revolt.
Online difficultiesBolland, now into the fourth year of his turnaround programme, admitted that the group’s performance had not been good enough. There were problems with the online operation, which saw sales slide by just over 8 per cent amid what he referred to as “settling-in” difficulties.
M&S has spent some £150 million (€189 million) upgrading its website and there was some astonishment among analysts that this should have resulted in a sales decline, whatever the teething problems. One M&S follower described the online performance as “a fiasco”.
It seems that not only have M&S customers had to re-register online, but many have complained that the new-look site is difficult to use. The group has promised a return to growth online by the Christmas period but the sluggish performance of its web business in the face of such a large investment is a cause for concern.
The core general merchandise division, taking in clothing and other non-food sales, saw its like-for-like sales in the 13 weeks to June 28th drop by 1.5 per cent, a larger fall than many analysts had expected.
This was partially offset by another good performance from the food retail side, where sales advanced by 1.7 per cent.
Many of the shareholders who made the trek to Wembley would have preferred a central London venue. But given that M&S provided the suits for England’s World Cup squad, the home of English football was perhaps an appropriate choice for the meeting. Similarities between the performance of the group and the national team were also pretty obvious.
There is a tradition in football of the club chairman publicly declaring his support for the team manager, only to announce his replacement a few days later. M&S chairman Robert Swannell declared his support for his chief executive several times at yesterday’s meeting, but this latest disappointing result from the group has done nothing to ease the pressure on Bolland.
The poor performance of the revamped website has also cast doubt on the recent management reshuffle, which saw the head of its multichannel operations, Laura Wade-Gery, handed responsibility for the entire retail chain. She also re- mains in charge of the website.
Clive Black, retail analyst at Shore Capital, said it was “cur- ious” that the person responsible for the mediocre online performance should have been given more responsibility.
The M&S chief executive has had more than enough time to pursue his strategy but has yet to prove he is capable of resto- ring the group to sales growth.
The City and most shareholders appear still to support him but Christmas will be crucial, and the website must be running smoothly by then.
Fiona Walsh is business editor of theguardian.com