LONDON — Marks & Spencer Group plc announced modest single-digit first-quarter sales increases on Wednesday during an annual meeting in which shareholders, even after prompting from the company’s chairman, chose talk about dress sizing over discussion of executive salaries.
This story first appeared in the July 18, 2003 issue of WWD. Subscribe Today.
The U.K. retailer said sales of clothing, footwear and gifts rose 3.9 percent in the first quarter ended July 12, compared with a 14.8 percent rise the year before, when the company was still riding the wave of an historic turnaround under the guidance of chairman Luc Vandevelde.
General sales rose 3.4 percent, compared with 14 percent last year. “We had a satisfactory first quarter in which we saw an improvement in clothing performance, particularly in June,” said chief executive Roger Holmes during the mid-morning meeting at the Royal Festival Hall.
“Sales progress has been made in adult clothing, particularly in Per Una, which is now in its second year, together with an improved performance in women’s and men’s formal wear,” he said.
The M&S statement said the rise in clothing sales was driven by a 3 percent gain in unit transactions. In addition, about 10 percent less stock is being reduced in price during the current summer sale, which began on July 3.
Holmes said in the current fiscal year, the Limited collection, a smart casual line, would be extended to 75 stores from 50 stores nationwide. Later this year, as reported, the company will also launch the SP range of men’s casual wear aimed at men in their 30s and 40s.
Sales at Marks and Spencer Home dipped 1.4 percent in the quarter, compared with an increase of 5.9 percent last year. “The performance of home reflects our plans to be less promotionally-driven, particularly in furniture, to build the right foundation for the long-term profitable growth of the business,” Holmes said.
With annual sales of $586 million, and about a 2 percent market share, the home category is one of M&S’ most underdeveloped businesses. M&S has not set specific targets for market share, as the company believes the new offering has unlimited potential.
As reported, Vittorio Radice, the new executive director of the home business, plans to transform the offering into a path of discovery: He’s asked architect John Pawson to design a house within the M&S home store near Newcastle, and will organize merchandising around home-based rituals such as relaxing and entertaining.
Some 1,400 shareholders — mostly pensioners — attended Wednesday’s event, which began with an M&S branded buffet breakfast and ended with an M&S take-away lunch.
During the meeting, Vandevelde opened the floor to questions — and specifically those regarding managers’ pay packages. He also took pains to outline some of the company’s remuneration policies: “There is no reward for bad performance, and 50 percent of every managerial pay package is performance-related,” he said.
Vandevelde also reminded shareholders of his dramatically downsized salary since becoming part-time chairman.
But remuneration clearly wasn’t a big issue with the M&S audience. Some 91.8 percent of shareholders’ votes went in favor of managers’ remuneration packages and just 8.2 percent were against.