LONDON — Despite opposition from some shareholders — with 22 percent abstaining or voting against him — Marks and Spencer Group plc chairman Stuart Rose was elected executive chairman at the British retailer’s annual meeting Wednesday.
This story first appeared in the July 10, 2008 issue of WWD. Subscribe Today.
Rose said he had endured a flurry of attacks, including a description of him as “the Robert Mugabe of retail.”
Critics argued that his appointment to the position of executive chairman, which combines the duties of chairman and some of those of a chief executive officer, violated corporate governance rules and concentrated too much power in one role.
Defending his move, Rose said, “M&S is an institution that is bigger than any one individual, and that certainly includes me,” adding that he believed the change “was the right thing to do.”
The company said about 78 percent of shareholders voted in favor of Rose’s appointment, which was announced in March, 4.9 percent voted against it and 17.2 percent abstained. There had been predictions in the British press that as many as 30 percent of the shareholders would either vote against Rose or abstain.
Many of the retailer’s smaller investors congratulated Rose.
The vote came a week after Marks & Spencer’s shares dropped 32.5 percent on the London Stock Exchange when the retailer said sales rose 1.3 percent in the first quarter, but like-for-like sales fell sharply across all key categories. Rose blamed falling consumer confidence and a weak economic climate for the slide.
Rose said he doesn’t plan to take the retailer’s luxury-oriented food offering in a discounted direction and would continue to expand the largest British clothing retailer. “M&S is not and never will be a one-stop shop. We are upping the game in terms of innovation.”
Addressing shareholders’ complaints about the sharp fall in M&S’ share price in the last year, Rose said, “We are equally as unhappy. It reflects the market’s confidence in this particular sector. There’s currently very little interest in the investment market in consumer-facing stock like retailers.”
Rose acknowledged the slump in like-for-like sales in the first quarter. “Consumers are saying that their purses are pressed, the cost of living is going up faster, they are feeling the squeeze and it will take longer to feed through,” he said. “Marks & Spencer is a bit like the smoke detector in your kitchen,” he added, explaining the retailer was vulnerable to shifts in consumer spending as it holds the largest clothing market share in the U.K. and serves 20 million customers.
However, company deputy chairman David Michels said during the meeting at Royal Festival Hall that in a difficult economy, “continuity is more important. We needed Stuart to run this company, he has a job to finish and he can do it better than anyone else.”
Shareholders also passed resolutions to elect Kate Bostock, executive director of clothing, to the board, and to reelect Stephen Sharp, executive director of marketing to the board.