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| Sell your shares if you're unhappy, says M&S chief Marc Bolland | Sell your shares if you're unhappy, says M&S chief Marc Bolland |
| (4 months later) | |
| Marks and Spencer's chief executive Marc Bolland has told shareholders that if they are unhappy with the business they should sell their shares, as the underperforming womenswear division dragged the company to a second consecutive decline in annual profits. | Marks and Spencer's chief executive Marc Bolland has told shareholders that if they are unhappy with the business they should sell their shares, as the underperforming womenswear division dragged the company to a second consecutive decline in annual profits. |
| UK sales fell 1% overall, with a particularly poor performance in general merchandise – mainly fashion and homewares – where sales dropped 4.1% on a like-for-like basis. | UK sales fell 1% overall, with a particularly poor performance in general merchandise – mainly fashion and homewares – where sales dropped 4.1% on a like-for-like basis. |
| The results might have been worse had it not been for a 4.5% rise in international sales and a 16.6% boost in multichannel business. Food was also up 1.7% in the UK. | The results might have been worse had it not been for a 4.5% rise in international sales and a 16.6% boost in multichannel business. Food was also up 1.7% in the UK. |
| Total group sales inched up to £10bn but profit for the year to end of March fell 5.8% to £665m. | Total group sales inched up to £10bn but profit for the year to end of March fell 5.8% to £665m. |
| Bolland is under growing pressure to improve sales and some analysts believe he will lose his job if the business does not show strong signs of improvement over the coming months. However, he insisted that "time frames are irrelevant" and said that unhappy shareholders could always "vote with their feet". | Bolland is under growing pressure to improve sales and some analysts believe he will lose his job if the business does not show strong signs of improvement over the coming months. However, he insisted that "time frames are irrelevant" and said that unhappy shareholders could always "vote with their feet". |
| He added: "I've always said this is a big job. I think you have seen from the scope of the job that this is one of the largest transformations in retail that you've seen in the UK. This is a difficult job to see through. I'm prepared for it because I like a job like that." | He added: "I've always said this is a big job. I think you have seen from the scope of the job that this is one of the largest transformations in retail that you've seen in the UK. This is a difficult job to see through. I'm prepared for it because I like a job like that." |
| The shares climbed 27p to 268p – their highest level since 2008, but still way short of their 742p peak in 2007. | The shares climbed 27p to 268p – their highest level since 2008, but still way short of their 742p peak in 2007. |
| It has been a difficult year for M&S, with bad summer weather last year leaving summer dresses unsold.Bolland has installed a new management team to revamp of its key womenswear ranges, appointing a new head of general merchandise, John Dixon, and bringing former Debenhams chief executive Belinda Earl on board as part time style director.Their new autumn/winter fashion range was launched last week and is being seen as "make or break" for Bolland. | It has been a difficult year for M&S, with bad summer weather last year leaving summer dresses unsold.Bolland has installed a new management team to revamp of its key womenswear ranges, appointing a new head of general merchandise, John Dixon, and bringing former Debenhams chief executive Belinda Earl on board as part time style director.Their new autumn/winter fashion range was launched last week and is being seen as "make or break" for Bolland. |
| New store formats have been rolled out across 337 stores – 65% of total sites – with the remaining due for an upgrade by the end of the year. | New store formats have been rolled out across 337 stores – 65% of total sites – with the remaining due for an upgrade by the end of the year. |
| Bolland described the online business as M&S's new "flagship store". However, he said there are no plans to introduce an online home delivery service for food, despite it being one of the few areas of success for the business. | Bolland described the online business as M&S's new "flagship store". However, he said there are no plans to introduce an online home delivery service for food, despite it being one of the few areas of success for the business. |
| He said: "We are the fastest growing retailer in food by far at the moment and part of that is because we have concentrated on getting people into our stores to see innovation for themselves. The business case against us going online is that our basket size is much smaller than supermarkets. We need to have between £100 and £125 baskets for it to be any way affordable and our baskets are very small because it is a top-up shop." | He said: "We are the fastest growing retailer in food by far at the moment and part of that is because we have concentrated on getting people into our stores to see innovation for themselves. The business case against us going online is that our basket size is much smaller than supermarkets. We need to have between £100 and £125 baskets for it to be any way affordable and our baskets are very small because it is a top-up shop." |
| His former employer, Morrisons, recently completed a 25-year deal with Ocado to set up its first online delivery service. Bolland said during his time there that he did not believe an online model would work. | His former employer, Morrisons, recently completed a 25-year deal with Ocado to set up its first online delivery service. Bolland said during his time there that he did not believe an online model would work. |
| Sophie Albizua, co-founder of the eNova Partnership, a multichannel retail consultancy, said M&S should not dismiss a click-and-collect online food business because "M&S has the advantage of a differentiated food range, away from the lower margin weekly shopping, and an existing multichannel customer base who will increasingly demand the whole range online." | Sophie Albizua, co-founder of the eNova Partnership, a multichannel retail consultancy, said M&S should not dismiss a click-and-collect online food business because "M&S has the advantage of a differentiated food range, away from the lower margin weekly shopping, and an existing multichannel customer base who will increasingly demand the whole range online." |
| Due to the store upgrades and the improvement in the supply chains, capital spending hit £821m. This is slated to fall to £775m next year and £550m from 2014/15 onwards – lower than expected. Bolland said: "We have done most of the heavy lifting of the legacy investments. The car has been rebuilt, however it still needs the completion of the e-commerce distribution." | Due to the store upgrades and the improvement in the supply chains, capital spending hit £821m. This is slated to fall to £775m next year and £550m from 2014/15 onwards – lower than expected. Bolland said: "We have done most of the heavy lifting of the legacy investments. The car has been rebuilt, however it still needs the completion of the e-commerce distribution." |
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