Marc Bolland, chief executive of Marks and Spencer, said he could detect the first signs of progress in reviving the crucial clothing business, despite the high street bellwether reporting its eighth consecutive quarter of falling fashion sales.
Sales of general merchandise, including clothing, fell 1.6 per cent in the three months to June 29, compared with the year earlier, broadly in line with analysts’ expectations of a 1.5 per cent decline.
Like-for-like food sales rose 1.8 per cent, ahead of the consensus of analysts’ forecasts of a 1.6 per cent increase.
“We see some progress in general merchandise. Not enough yet. We are not yet happy. It has to grow faster,” Mr Bolland told shareholders at M&S’s annual meeting.
The performance in the first quarter of the 2013/14 financial year compares with the period a year ago when like-for-like general merchandise sales fell 6.8 per cent, making for an undemanding comparison this year.
“We have always said that this will be a step-by-step approach,” insisted Mr Bolland.
He said that M&S had experienced a difficult start to the quarter, as a result of poor weather in April. May had been “a bit more stable,” but June had been “highly promotional” across the market, including not only rivals’ special offers but also early sales featuring discounts of 50-70 per cent.
Food had an “excellent” quarter, the company said, with the sales increase comparing with a period a year ago that included the Easter and Diamond Jubilee holidays.
Online sales rose 29.9 per cent, while international sales rose 8.7 per cent, excluding currency movements.
M&S includes its online performance in its like-for-like general merchandise sales. Analysts at Citigroup, the company’s joint broker, estimated that store-based like-for-like general merchandise sales fell 6 per cent in the first quarter.
The performance, and executive pay, came under scrutiny from M&S’s army of private investors at the annual meeting.
One shareholder, who called on M&S to focus on its core UK market, said: “Over two years, wars are won and lost. Just how long are we supposed to wait until we see the results [of the turnround]?”.
Private investor John Farmer said: “Year after year we get excuses. We get pleas for more time.”
Robert Swannell, chairman, said: “We are not here for the popularity contest, we are here to make the right decisions for the long-term,” adding that he would “not risk this company to do it quickly”.
One shareholder also questioned Mr Bolland’s £829,000 annual bonus.
“Is there any justifiable criteria for the bonus when the performance has not been satisfactory?” he said.
Mr Swannell said: “Every pound of the bonus that is awarded to Marc and the team …was wholly justified.”
Some 8.6 per cent of the votes cast failed to support the remuneration report, while 4.68 per cent of the votes cast failed to support the re-election of Mr Bolland.
Shares in M&S closed down 1.41 per cent at 453.2p.
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