Marks & Spencer is offering small investors a direct line to the boardroom with the creation of a shareholder panel to scrutinise performance.
The plan was announced on Tuesday by the M&S chairman, Robert Swannell, at its annual investor meeting, where management regularly faces fierce criticism of its underperforming clothing business which last week reported its biggest fall in sales since the 2008 banking crisis.
“We want to listen to you and take you with us as we change Marks & Spencer,” he said.
The retailer has already held trial events including a lunch and tea party, with a guest list drawn from vocal AGM regulars. The meetings had delivered some “perceptive observations”, Swannell said, although a short video of highlights included comments such as “too much pastel [coloured]” clothing and a need to “sparkle up” designs for older women.
The shareholder meeting was the first for Steve Rowe as chief executive. Rowe, who took over from Marc Bolland in the spring, and has worked at M&S for 26 years, has pledged to turn around the clothing business by improving ranges and availability, cutting prices and offering fewer promotions.
“I know that it’s a big ask for me to stand here today with a new set of ideas and ask you to trust me that things will be different this time,” he said of the plan, which will hit sales and profits in the short term. “[But] I firmly believe that we can return our clothing business to positive growth.”
M&S reported a 8.9% fall in underlying clothing and home sales in three months to 2 July as Rowe axed 28 promotions. Last year, more than 40% of its clothing was sold on promotion. It is imperative the retailer comes off “the drug that is discounting and sale”, he said.
Setting out his turnaround plan in May, Rowe promised to better serve the company’s most loyal group of shoppers, dubbed “Mrs M&S”. These fiftysomething women had been neglected as the retailer chased younger shoppers, but Rowe promised to “cherish and listen to her”.
But one shareholdertook umbrage at the stereotype: “My name is not Mrs M&S,” she said. “In my view, the remark about Mrs M&S shows that you don’t [understand your shoppers]. It was in my opinion the most disastrous piece of marketing since Gerald Ratner extolled the virtues of his silver-plated dinner set.”
She added: “We don’t live in a world where women dress from head to toe in one brand. We’re individuals and don’t like to be labelled especially when it identifies you with a failing retailer.”
The M&S annual reports lists 165,727 private shareholders but the use of nominee accounts means the number is far higher, with the group speaking for about 30% of its shares. The retailer will invite investors to apply to join the panel when it writes to them in January.
More than 76o shareholders attended the meeting at Wembley Stadium, north London,. They are believed to be among a hardcore keen to get involved. M&S said it had not yet decided how to sift applications or the panel’s remit.
M&S shares have lost 38% of their value in the past year and some shareholders questioned Bolland’s legacy at the meeting. The former chief executive earned £17m over his six-year stint although the most recent annual report revealed the board cut his final bonus by a fifth.
Swannell said Bolland had overseen essential investment including the development of the M&S website and an overhaul of logistics. “Part of our business has performed strongly [food], part has not performed as well as it should have done [clothing]. Judge us by our results but in the meantime don’t ignore the dividends,” the chairman said. At the revealing of its full-year results, the retailer announced a special dividend of 4.6p a share, or a total of £75m.
“There are areas of our business where we should have done better but our business is immeasurably stronger than it was,” Swannell added on Tuesday.
