News Column

Shareholders vent frustration as promises fail to deliver

July 9, 2014

KASMIRA JEFFORD



"WE'LL be home by Christmas!" That tragically optimistic prediction made by soldiers marching off to war in 1914 jumped to mind yesterday when Marks & Spencer boss Marc Bolland stood up in front of shareholders at a hall within Wembley Stadium and pledged to have the website returning to growth in time to enjoy it with mince pies and sherry, following a bungled launch in February.


It is promises of this kind that an M&S retail investor - your next door neighbour who has held on to a handful of shares for over 30 years - always remembers and angrily reminds the board of at the annual meeting when it hasn't been delivered. As one investor and retired member of staff put it to Bolland yesterday: "Since you have been chief executive, I have attended every AGM and I have to say that each time your promises have filled us with confidence for the coming year only to return a year later full of disappointment."


After reporting its 12th consecutive quarterly drop in non-food sales, it is no wonder that M&S faced more than a few sharp questions from disgruntled shareholders wanting to know how much longer it will take to revive the high street giant.


And it wouldn't be a true M&S AGM if John Farmer wasn't there to ask them. A regular attendee, Farmer caused a stir in the Wembley audience when he compared M&S's profit returns to those of retailer Next, highlighting that its arch rival had delivered a third of M&S's revenues last year but made over 50m more in profits.


He asked: "When will this board stop complacently apologising for underperformance and actually rectify that after three years of flagging clothing sales?" This sparked a sharp response from M&S's ever-polite chairman Robert Swannell, who said that to describe the board as complacent was "utterly misplaced" and spoke passionately about the high calibre of the board.


He did however "take [his] hat off to Next" and, conceding that the firm had been consistent for 40 years. Swannell said: "We have set out the way in which we're going to develop this business: we need to do it - as Marc has continually pointed out - step, by step, by step, by boring step, so that we are consistent in delivering returns.


"That's the secret of success. You don't do it in a quarter, you don't do it in a year, you don't do it in two years. You do it over a consistent decade, and that's what M&S is going to do."


As ever, Bolland was silent during all of this as Swannell took the questions directed at his beleaguered chief exec and skillfully deflected them, like a defender heading away a free kick.


As the meeting dragged on, there were audible yawns - with shareholders in the crowd drifting off to sleep - as the audience gradually lost interest in M&S's performance and started to think of a more pressing issue: lunch.


Swannell patiently nodded as one shareholder used her moment in the spotlight to criticise the retailer's bolognese sauce - "You seem to be having a love affair with chilli at the moment" - while another asked the company to put up "better signage" outside its stores.


After two hours of grilling, votes were finally counted and 96 per cent of M&S shareholders voted to re-elect Marc Bolland. This was the lowest count of all the board members, but Bolland said he was unconcerned by the outcome.


Speaking at a lunch afterwards he said: "For any chief executive that is a high number."


WHAT M&S SHOULD DO TO IMPROVE ITS AILING WEBSITE 1 Don't force customers to re-register This ship may have sailed, but by far the biggest mistake made by M&S on its new website was to ask every customer to re-register. It may be out of the company''s hands, as the previous site used the Amazon platform. But if it was possible to grab all of the email addresses from Amazon, there''s no technical reason why they couldn''t be "pre-registered" on the new site.


2 Make search results and filters more helpful On the current site, typing "mens" into the current site displays an autocomplete drop down with "Man Bag" listed first. Meanwhile, the filters are impossible to deselect once chosen, and worse still, choosing a category when I didn''t already have one selected leads to all of my filters being lost without warning.


3 Tone down the feedback popup After searching for a product, a feedback popup appeared. On mobile, this is really intrusive as it covers the entire page. It would be much better to only show the feedback popup at the end of the process.


4 Simplify the checkout When clicking the Checkout button, users end up on the registration page. If the customer doesn't have an account, they're left in a frustrating loop that can only be broken my an email address - but the site doesn't point that out. Ask for the email address without showing any other options. Then you can tell the user whether they have an account.


5 General bug fixes At the top of along list include "Product" and "On model" buttons that don't do anything, a confusing "refresh" icon on the desktop version, and an unclickable Your Account" menu.


BY BEN BARDEN DEVELOPMENT MANAGER FOR CITY A.M KEY QUESTIONS ASKED BY M&S INVESTORS AT THE AGM Staff will not receive a bonus this year. Is that not a failure of leadership on behalf of Marc Bolland? Chairman Robert Swannell said it did not meet financial target so nobody will receive a bonus. Shareholders and commentators expect bonuses on outstanding performance - it is not a question of failure.


Will M&S commit to a meeting with the Living Wage Foundation ? Swannell said he could not, but said M&S would continue to be "a great employer".


Why is it that the non-executives do not have any textile experience? Swannell argued M&S's board was well balanced with much consumer experience.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: City A.M. (UK)


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