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| M&S chairman pleads for time as clothing sales fall further | M&S chairman pleads for time as clothing sales fall further |
| (35 minutes later) | |
| Marks & Spencer's chairman pleaded with investors to give the company time to turn around its fortunes on Tuesday after it reported underlying sales of clothing and non-food items fell for an eighth consecutive quarter. | Marks & Spencer's chairman pleaded with investors to give the company time to turn around its fortunes on Tuesday after it reported underlying sales of clothing and non-food items fell for an eighth consecutive quarter. |
| At the retailer's annual meeting at a suite in London's Wembley Stadium, Robert Swannell told shareholders: "We are here to make decisions for the long term. It takes time and we want to do it right and get it right, even if there is some short-term pain." | At the retailer's annual meeting at a suite in London's Wembley Stadium, Robert Swannell told shareholders: "We are here to make decisions for the long term. It takes time and we want to do it right and get it right, even if there is some short-term pain." |
| The board tackled questions about whether chief executive Marc Bolland deserved his £2.1m pay packet, whether the company was focusing on international expansion at the cost of the UK business, and the state of the toilets in the Marble Arch flagship store. | The board tackled questions about whether chief executive Marc Bolland deserved his £2.1m pay packet, whether the company was focusing on international expansion at the cost of the UK business, and the state of the toilets in the Marble Arch flagship store. |
| Shareholders were treated to a catwalk show of the autumn-winter collection. The company is hoping the range will turn around recent bad fortunes when it goes on sale later this month. | Shareholders were treated to a catwalk show of the autumn-winter collection. The company is hoping the range will turn around recent bad fortunes when it goes on sale later this month. |
| However, before any upturn, Bolland revealed that like-for-like sales of clothes and non-food fell by 1.6%, offset by a 1.8% gain from the food side. | |
| Bolland said sales had been hit by the poor weather in April, which triggered heavy promotional activity across the sector in June as retailers attempted to catch up. "More than a third of the market was on promotion, so the average sales price was lower as a result," he said. "Market share was slightly down but we were not surprised because we have an extremely high share in tops and bottoms so, if the summer doesn't kick off, we are hit more than others." | Bolland said sales had been hit by the poor weather in April, which triggered heavy promotional activity across the sector in June as retailers attempted to catch up. "More than a third of the market was on promotion, so the average sales price was lower as a result," he said. "Market share was slightly down but we were not surprised because we have an extremely high share in tops and bottoms so, if the summer doesn't kick off, we are hit more than others." |
| Total UK sales were up by 2.7%, with food growing by 4.5% and general merchandise by 0.5%. The online division M&S.com pushed sales ahead by almost 30%, boosted by the introduction of free next-day delivery to stores. International sales rose by 8.7%. | Total UK sales were up by 2.7%, with food growing by 4.5% and general merchandise by 0.5%. The online division M&S.com pushed sales ahead by almost 30%, boosted by the introduction of free next-day delivery to stores. International sales rose by 8.7%. |
| Bolland has been under increasing pressure to stem the decline in M&S's core clothing division and is pinning his hopes on the autumn and winter ranges. | Bolland has been under increasing pressure to stem the decline in M&S's core clothing division and is pinning his hopes on the autumn and winter ranges. |
| He has assembled a new management team including a new head of general merchandise, John Dixon, and part-time fashion director Belinda Earl. The autumn-winter range is the first designed by his new team. | He has assembled a new management team including a new head of general merchandise, John Dixon, and part-time fashion director Belinda Earl. The autumn-winter range is the first designed by his new team. |
| Bolland admitted he was disappointed with the clothing part of the business, but pointed out that three out of four sectors – food, online and international – were successful. | Bolland admitted he was disappointed with the clothing part of the business, but pointed out that three out of four sectors – food, online and international – were successful. |
| "We need to reassert leadership in quality, drive aspiration, style and fashionability. We will not cut corners at M&S and we will not do anything to lose the trust we have," he said. | "We need to reassert leadership in quality, drive aspiration, style and fashionability. We will not cut corners at M&S and we will not do anything to lose the trust we have," he said. |
| Shareholders raised concerns over his pay, which included a bonus of £829,000, although profits fell for the second year in a row, and asked for more focus on the UK business. | Shareholders raised concerns over his pay, which included a bonus of £829,000, although profits fell for the second year in a row, and asked for more focus on the UK business. |
| Almost 4.5% of shareholders voted against Bolland's re-election to the board, while 8.6% opposed the remuneration report, which included Bolland's bonus. | Almost 4.5% of shareholders voted against Bolland's re-election to the board, while 8.6% opposed the remuneration report, which included Bolland's bonus. |
| One shareholder said: "Marks & Spencer makes 80% of its profits in Britain, and we need to get the home market right before looking at more international expansion. Just how long do we have to wait before we see a recovery?" | One shareholder said: "Marks & Spencer makes 80% of its profits in Britain, and we need to get the home market right before looking at more international expansion. Just how long do we have to wait before we see a recovery?" |
| Swannell replied: "We've got our eyes incredibly and entirely focused on the UK and I agree with you that the UK is the absolute heart of our business, but we are going through the biggest logistics and IT transformation ever. These things take time. If you think taking 110 distribution centres down to three should be done in a year then you'd be wrong." | Swannell replied: "We've got our eyes incredibly and entirely focused on the UK and I agree with you that the UK is the absolute heart of our business, but we are going through the biggest logistics and IT transformation ever. These things take time. If you think taking 110 distribution centres down to three should be done in a year then you'd be wrong." |
| Bolland added: "Nine years ago, the IT systems were crap. Nine years ago, the distribution systems were crap. So we've come a long way." | |
| The company has recently opened superhub warehouses to replace the current crop of smaller warehouses dotted throughout the country in order to compete against rivals with its online business and click and collect services. | The company has recently opened superhub warehouses to replace the current crop of smaller warehouses dotted throughout the country in order to compete against rivals with its online business and click and collect services. |
| Another shareholder wanted the board to allay fears of a possible takeover, with rumours swirling that the Qatari sovereign wealth fund has been eyeing up a possible bid for the company. | Another shareholder wanted the board to allay fears of a possible takeover, with rumours swirling that the Qatari sovereign wealth fund has been eyeing up a possible bid for the company. |
| He said: "I remember when Philip Green tried to buy the company and we fought him off, but I now read that the Qataris are interested. I am fearful because they already own Harrods, the Shard and the apartments in the Olympic Park. Can the board reassure me that there will be no takeover, ever?" | He said: "I remember when Philip Green tried to buy the company and we fought him off, but I now read that the Qataris are interested. I am fearful because they already own Harrods, the Shard and the apartments in the Olympic Park. Can the board reassure me that there will be no takeover, ever?" |
| Swannell refused to answer the question directly, saying: "It is obviously a matter we take seriously". | Swannell refused to answer the question directly, saying: "It is obviously a matter we take seriously". |
| He revealed that he helped M&S fight off Green's aborted takeover in 2004. "Let's just say, I don't think I'm right at the top of Philip Green's Christmas card list," he said. | He revealed that he helped M&S fight off Green's aborted takeover in 2004. "Let's just say, I don't think I'm right at the top of Philip Green's Christmas card list," he said. |