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Frustrated shareholders lambast M&S board's slow progress

Marks & Spencer chairman Robert Swannell faced a barrage of criticism on Tuesday (July 8) as it reported the 12th consecutive quarter of declining like-for-likes for general merchandise.

Speaking at the annual general meeting, Swannell told shareholders M&S had been through a period of investment and was now “set up for delivery”.

But one frustrated investor said it had been “comprehensively outperformed” by other retailers, while another accused the board of being “complacent”. A third said: “This must be the slowest turnaround of a ship in history.”

Chief executive Marc Bolland was the target of most of the shareholders’ ire. One described him as a “bread and butter and beans man” without clothing expertise, while another questioned whether a turnaround was possible while he was still in charge.

Swannell offered Bolland support throughout, saying the right team was in place. He said the business was stronger than when Bolland joined in 2010 and added: “It’s a step-by-step process.”

On the day of the AGM, M&S revealed total general merchandise sales fell 0.8% in the 13 weeks to June 28, while like-for-likes dropped 1.5%. Within clothing, like-for-likes declined 0.6%, although total sales edged up 0.8%. Group sales rose 2.3%, but in the UK this was a smaller growth of 2% for total sales and 0.3% in like-for-like terms. Food outperformed, up 4.2%.

M&S.com, which relaunched in February, contributed to much of the decline again this quarter, with site sales down 8.1%. International sales were up a healthy 4.7%.

Swannell said: “The general merchandise business did not come up to our expectations. We’ve spent the last three years investing in this to make it stronger for the long term, but we know we have more to do.”

He said the website relaunch had been one of the team’s “biggest achievements” and added: “We’re confident we’ve made the right investment.”

However, James McGregor, director of retail consultancy Retail-Remedy, said: “This is the last quarter that the bedding-in of the new website can be used as an excuse for the poor performance of clothing.

“Clothing at M&S is still very much on the rack and we will need to see strong numbers on a consistent basis to be convinced otherwise.”

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