British retailer Marks & Spencer reported a smaller-than-expected drop in first-quarter underlying sales as executive chairman Stuart Rose insisted he was “not concerned” by a growing row over his succession.
The 125-year-old group, which sells clothes, homewares and food from over 600 stores in Britain and about 285 abroad, said it remained cautious although there were positive signs on consumer sentiment.
“Consumer confidence appears to be stabilising. However, we remain cautious about the outlook for the remainder of this and next year and will continue to run the business accordingly,” Mr Rose said today.
Britain's retailers are battling the deepest recession in decades. Industry sales are falling and a raft of the companies in the sector have posted slumps in annual profit.
M&S said sales at UK stores open over a year fell 1.4 per cent in the 13 weeks to June 27th, after a fourth-quarter drop of 4.2 per cent.
That was the seventh quarterly fall in sales in a row, but also the best performance since the second quarter of its 2007-08 financial year. Analysts had forecast a fall of 1.8 to 3.5 per cent, according to a company poll of ten.
The improvement is unlikely to relieve the pressure on Rose, under fire from investors for combining the roles of chairman and chief executive last year against corporate governance guidelines.
He survived an investor rebellion last July, but faces fresh calls to share power at a July 8th agm.
Three shareholder advisory groups - Glass Lewis, Pirc and RiskMetrics - have urged investors to back a resolution calling on Rose to appoint an independent chairman by July 2010.
“My job along with the board is to concentrate on running the business, getting it through the recession, doing the hard nitty-gritty work in the engine room ... and frankly I'm not concerned about it,” (the succession row) Mr Rose told reporters.
He said the board's position on succession has not changed.
“We will have a new chief executive in 2010 and we will have a new chairman by 2011. The only date that's written down is the fact that I am leaving come hell or high water by July 31 2011.”
The stock has lagged the DJ Stoxx European retail index by 9 per cent over the past year, but has climbed about 50 per cent this year on recovery hopes.
Reuters