EMBATTLED Marks & Spencer boss Marc Bolland ditched high-flyer Kate Bostock on Tuesday and called in new style gurus after clothing sales slumped in the face of poor weather and fierce competition.
The firm said Bostock was leaving “by mutual consent” but was accused by shareholders of making a scapegoat of its merchandise chief after non-food revenues fell short of already low City expectations.
The disappointing figures made for a stormy annual meeting, with one angry shareholder branding the chief executive “the Bob Diamond of retail”.
There was a 5 per cent vote against Bolland’s re-election amid shareholder concerns about “excessive” bonus plans and declining levels of service.
Marks said its clothing sales continued to be impacted by merchandising issues reported in April, when it ran out of stock in some best-selling lines of womenswear.
But it said it had taken steps to bring stock back on target for the autumn and winter season, which launches in stores later this month.
The firm said the clothing market continued to be “highly promotional”, especially in womenswear, in part due to unseasonal weather conditions which affected sales of casual tops, a key performer for the company.
UK clothing sales were 6.8 per cent lower on a like-for-like basis in the quarter to the end of June, while food was slightly higher. Total group sales were down 0.7 per cent.
Bolland said: “Our food business has again performed strongly. General merchandise underperformed in a difficult trading season. We are confident we are taking the necessary steps to address this.”
The retailer has hired ex-Debenhams and Jaeger boss Belinda Earl and former Estée Lauder president Patrick Bousquet-Chavanne as it seeks to improve its fashion offering and develop a credible beauty products range.
But some experts were not convinced, especially as another set of stellar results at younger fashion brand Asos yesterday underlined the challenges M&S is facing.
Many lowered their profit forecasts for M&S despite the fact the company said it was not changing its guidance.
Investec analyst Bethany Hocking said the consensus was drifting lower and would probably settle at around £685 million for the full year.
She said: “Clothing still accounts for roughly half of profits, so issues there are in need of a solution.”
Independent retail analyst Nick Bubb said: “M&S’s problems in womenswear go far beyond the weather as they are clearly losing market share.”
He added that Bostock, linked with a top job at Asos, had been made a scapegoat as Bolland fought for his job.
At the AGM Bolland sang the praises of Bostock, who leaves in October and was sat on stage next to company veteran John Dixon, who will succeed her. Currently head of food, Dixon joined M&S in 1986 and is seen as a possible replacement for Bolland in the long term. Another company insider, retail director Steve Rowe, is promoted to the board to take on his role in food.
Investors responded positively, the shares rising 2 per cent to 327.8p.
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Sunday 19 May 2013
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