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Filter by: Board | Shareholders | Customers | Employees | Plan A

As a long term institutional investor in M&S, we are concerned about the continuing governance and operational problems experienced at M&S. We are aware that the ongoing uncertainty regarding the future structure of the Board and Sir Stuart's successors present an unwelcome distraction for the company and its shareholders. Our preference has always been for the issues to be resolved in an expeditious and transparent manner. It seems to us that one positive step the Board could take to allay many shareholders concerns is for Sir David Michels, who is for all intents and purposes acting as Chairman, to be appointed as Chairman. Sir David has made no secret of his desire to rise to the challenge and we would ask Sir Stuart why he is against this move?

The Board has set out a clear and transparent succession timetable for the appointment of an independent Chairman, a decision that the Board will take at the appropriate time independently of Sir Stuart. If Sir David or another Chairman was to be appointed before a new Chief Executive is in place, the assumption that Sir Stuart would revert to the role of Chief Executive would have the effect of squeezing the space which has been created for executive directors and senior management to be nurtured and for their skills and talents to develop. That was the genesis of the decision the Board took in 2008, when we concluded that it would be in the best interests of the Company to retain Sir Stuart Rose until July 2011.

In opposing resolution 16 (resolution requisitioned by LAPFF – that the Board takes all reasonable and practical steps to bring forward the appointment of an independent Chairman to July 2010), the Board says it is concerned that Sir Stuart might consider his early departure as Chairman to be the right time to leave the Board entirely. Whilst some might view such a prospect with alarm, others might think it’s a good idea. Please would Sir Stuart clarify his intentions?

The primary intention is to ensure that there is an orderly succession in the business and that a new Chief Executive and the right Chief Executive is appointed in 2010. The rationale for combining the roles was to allow internal executive directors and senior management more space to develop to maximise the prospect of an internal candidate emerging as a future Chief Executive. M&S is not in a position today, in July 2009, to announce a new Chief Executive, it’s most important that this position is in place first, after that the Board has decided it would like me to stay for a short period of time, before a new independent Chairman is appointed.

Will Louise Patten resign as Chairman of the Remuneration Committee given her appointment as a non-executive director of other companies?

Louise Patten is an exemplary Chairman of our Remuneration Committee. We are here to discuss Marks & Spencer this afternoon, not any other companies that Louise is involved with. Louise enjoys the full support of the Board and she has made it very clear how the Remuneration Committee runs at M&S.

Why won't the city media and investors leave Sir Stuart alone to get on with the job?

We understand that M&S gets scrutinised, we must not complain, because in good times we get a lot of positive publicity, and in bad times we must grin and bear it. What is absolutely vitally important is that your Board and the senior executives who run this business, are given the space and the time to concentrate on getting through the recession. That is what we will try and do and what we will get done.

When will Marks & Spencer generate a total shareholder return (“TSR”)? How soon in Clothing will M&S emulate Next and in Food, emulate Tesco? How soon will M&S more dramatically increase its foreign sales?

The report and accounts quite clearly show that we have a significant TSR, and in fact for the last five years have beaten most of the FTSE 100, albeit less so in the past year. You mentioned Next and Tesco and you mentioned positioning; We are M&S, we are not Tesco, and we are not Next, our demographic is the widest demographic of any retailer in clothing in the UK, and we position ourselves to ensure that through our good, better and best pricing, we offer our 21 million customers, the very best that they can afford. We will never compromise on when we talk about Food is quality. John Dixon has introduced a ‘Wise Buys’ range, that is now 18% of M&S Food sales demonstrating that our Food business has reversed its decline. The bulk of our profit decline last year was margin that we sacrificed to ensure that our customers stayed faithful, I think they understand what we are trying to do, and I believe we will go back to a better position in the forthcoming four or five years.

In respect to overseas I am disappointed that we have only got around 10% of overseas sales at the moment, but we have gone quite a long way in quite a short time. We have a strong team in place, we have quite an aggressive plan. I am confident that this business will have a vibrant and strong international business.

Was the reason for profits being down by 40% due to your inability to control operating costs?

The reason why profits were down last year was not as a result of an increase in operating costs, but primarily because we decided, consciously, as a Board to reduce our profit margins across a wide range of products, particularly in foods, to ensure that we kept faith with our customers during difficult times. It is true to say that we also suffered some additional mark-downs in clothing as a result of stock levels that we held in a declining market, but Ian Dyson and his team have done a great job in keeping stocks under control, and in the current financial year on a like-for-like basis our costs will actually be down 1%.

Why has the dividend been cut by 21% when you have been awarded a 55% increase in salary?

The Board very much regrets having to drop the dividend, but our duty as directors of your company is to ensure we have the right financial strength on the balance sheet. The decision to reduce the dividend was taken after a very difficult debate, however it was the prudent thing to do. Stuart did not receive an increase in salary during the year. The Annual Report is transparent in respect to directors’ remuneration.

Why is the process at the till point more difficult for chargecard holders than other card users?

We process all chargecards in the same way that we process all credit & debit cards. There are no differences in the transaction. Therefore our chargecard holders should not experience any difficulties in making payments at all of our General Merchandise and Food till points.

How do Marks & Spencer decide on levels of staff per store? I never find enough staff in my local store?

This is an issue we monitor on a weekly basis and something we constantly try to improve. Staffing costs are our biggest discretionary spend, we plan each store separately based upon a range of factors. The main determinants are planned sales, the level of corporate or local activity in the store, the range of services that are offered and the operational complexity of the store. This is at the top of our agenda and we will continue to focus on it.

Can customers have better availability on Food and General Merchandise, specifically thermal underwear and wholemeal bread?

This is a very important point, the essence of the business. In Food we have changed our merchandising structure to address this issue and have also focussed on our most popular lines and increased our purchase of such items, availability has increased and waste has decreased but we recognise that we must continue to make progress.

In General Merchandise, availability on seasonal merchandise is more difficult to predict as we balance availability against excessive seasonal reductions. A colder snap will obviously mean increased thermal sales and reduced availability later in the season. However we will take your comments on board and look at our thermal product purchase for next season.

Are there any plans to modernise Weston-Super-Mare store, particularly the toilets and the M&S café?

We will send our estates and store environment teams to the store to assess what urgent work needs to be done.

What is being done to improve your Menswear fashion?

We do have a lot of men in the fashion area, many of us including the head of menswear are our customers, so we have a direct interest in it. We are disappointed that we are not satisfying needs; we know we have work to do to strengthen our Menswear business, which is why we have gone back to the things that make us a destination shop for our customers : value, innovation and availability. We have retained our number one position in Menswear in spite of challenging market conditions.

I don't think you are listening to your customers regarding the fitting of your clothes and shoes. I can go in to numerous other shops, your competitors, and buy clothes and shoes that fit and yours don't. Are you going to do something about it?

I am disappointed that you are not a satisfied customer, because we have substantial market share in clothing; we are the largest retailer of women’s clothing in the country, we have substantial market shareholding in footwear. We believe fit is as important, if not more so, than size. We have dedicated fit technologists working with our suppliers and buyers to ensure best fit and these are trialled on real people, not just mannequins. However, we are always reviewing our products to ensure fit standards are being met and will continue to work hard to address any concerns customers may have.

What cost effective steps are you taking to appeal to the "buying generation" - ie late twenties / early thirties womenswear market? I don't feel you are making the most of the market available and you don't appreciate your customers want more value for money

It is the perennial problem. We are pleased to say that over the last year we have attracted much more under 35-year-olds to M&S than the preceding year. It is always a difficult balance to get right. With regard to value; we are over-trading on value, which means that we are selling more value clothing than we have ever sold before, and Kate and her team are on with ensuring we do more. We will not reduce the quality standard at any expense, and we will not go unethical. We will give you the best value that we think is right from the appropriate sources.

Can the introduction of signs in clothing departments be considered? Without them it can be difficult as well as time-consuming to identify the section you require, whether it is shirts, socks, or ties; especially in larger stores. So, ideally, signs suspended from the ceiling, pinpointing each section, would be very helpful to the shopper.

We agree we need to improve our signage, particularly in the clothing area. The good news is that in both White City and in Tamworth we have recently trialled some new signage, and we will be rolling out to 100 stores this Autumn. Signage is vitally important, as running such a wide and complex catalogue it is important that we get you as the customer to the place you want to go.

Are you satisfied that M&S acted with integrity and moral justification when 60 IT staff at Stockley Park were transferred to Cognisant, to work with imported labour from India? If so, why did ACAS say, ‘we could not believe that M&S would so blatantly violate the transfer laws’?

This is a very serious issue. M&S is very satisfied that it completed this transfer in a rigorous and appropriate way and employees were consulted fully. It must be stressed that M&S is not importing labour at all but are working to ensure that we are transferring these skills in the right way to a new supplier. We are satisfied that the TUPE transfer regulations have been applied appropriately. M&S has a very good reputation in relation to these types of TUPE transfer and has acted with real propriety.

When will customers be able to choose between Genetically Modified (GM) food and non GM-food, as already happens in competitors’ stores?

We introduced systems to maintain non-Genetically Modified food ingredients as well as animal feeds for fresh chicken, pork, beef, lamb, conventional milk, farmed salmon and shell egg production in the 1990’s in response to customer concerns. Our policy remains to only use non-GM ingredients in our food.

We continue to monitor customers’ views, but as recently as March 2009, the Food Standard Agency reported that GM remains an area of concern for consumers.

While you are charging 5p for the issue of bags, you are taking large advertisements in major newspapers, is this environmentally friendly?

Our Plan A eco-plan launched in January 2007 was designed to address our key environmental and social challenges and included actions to reduce the usage of single-use carrier bags. Our customers have responded positively to Plan A and have repeatedly asked to be kept informed and given information on how they can help. We have committed to provide this information through a wide range of media, including in-store, on our web-site as well as in the printed form. The environmental impact of newspaper advertising in minimal.

(Our policy of charging 5p for food carrier bags has succeeded in reducing usage in our food sections by 83% and the profits from the initiative, totalling £1.2m, have been donated to environmental charity Groundwork to help fund 46 parks, garden and play areas across the UK).

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