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Filter by: Financial | Product | Corporate Social Responsibility | Corporate Governance | HR

What impact has the poor performance of Childrenswear had on the business and when will you appoint an industry leader?

A. We know that Childrenswear has been a weakness for the last two years, but we may have seen the beginning of an improvement in the past two weeks. To quantify that, two quarters ago it was diluting our overall clothing performance by 1.5 %. In the most recent quarter that impact had reduced to 0.5%. However, we still have a lot to do.

We have had pockets of success to date, in particular the David Beckham ranges which continue to perform strongly.

Our focus right now is on the availability of schoolwear and initial signs are encouraging.

Marks & Spencer has always been able to attract able and talented people and we aim to do this for Head of Childrenswear. It's worth waiting for the right person.

We have a new design team and design processes in place, and are consolidating ranges in order to provide a clearer, stronger offer. It's also important to remember that while Childrenswear is important to us, it accounts for only 8% of clothing.

Q. Why do we operate some Simply Food stores through a franchise with the catering company Compass?

A. The arrangement with Compass relates only to railway stations, where they have control over those sites. Compass has given us the access and the opportunity to open Simply Food stores in these locations and we have an agreement to open 40 such stores.

We are very careful to ensure they are operated to our standards, and we trialled three locations, monitoring them closely before proceeding with any more.

Even by sharing the profits with Compass we make a comfortable return that we otherwise wouldn't have had access to.

Are we destroying our potential customer base by closing UK factories?

A. In our supply chain, we are aiming for better goods, delivered faster, at lower costs.

We worked with our suppliers to move their manufacturing abroad for the benefit of our customers, and today around 85% of our supply is from overseas.

We are now strategically positioned to take advantage of centres of manufacturing excellence, lower production costs and proximity to the UK.

Of course we regret that jobs in the UK clothing industry are being lost but our first responsibility is to our customers, our employees and our shareholders.

We believe it is irresponsible to keep an industry alive artificially. We hope most employees have been able to find work in other industries or with other companies.

Have you considered offering private shareholders store discounts or other incentives?

A. We could not do so on an equitable basis, since each shareholder holds a different number of shares in the Company.

Unfair to those shareholders unable to participate in discount schemes, e.g. insurance companies, pension funds and overseas investors.

Best way to reward shareholders is through dividend payments based on individual share ownership.

We are looking forward to rewarding you as customers through our new combined credit & loyalty card, when we launch nationally later this year.

Could you explain the downturn following the turnaround?

A. The final quarter of the year did show some slowdown, but the most recent quarter has shown some reassuring growth, especially in Food.

Could you explain what I read in the Times about losses in Europe?

A. We have ceased activity in Europe. We believe the article you are referring to relates to a case that we have taken to the European Court, where we stand to set a precedent. We are trying to recover £30 million against our UK taxes on approximately £100 million of losses we incurred in Europe some time ago.

Can you guarantee you will still be paying suppliers promptly, given the reference in the report about changing to 14 days?

A. As a 100% own brand company it is not in our interests in any way to pressurise our suppliers.

The report states our payment terms remain at 10 working days - the 14 days referred to is just sowing the same figure taking account of weekends.

I've read locally about Marks & Spencer having a problem with high numbers of shoplifters and bulk theft. Do you have figures on this, the cost of trying to prevent them, and the effect on our dividends?

A. The actual figures you ask for are not published, but theft is a concern for all the high street, not just ourselves, and we are very conscious of it. Our experience compared to other retailers is favourable.

We do a lot to ensure that we pick up the big risk areas and control them as far as we can.

Could you tell me what you are doing in relation to quality and fit, as I think there are still issues to be resolved with a number of items?

A: Customers' perception of M&S quality and fit continues to be ahead of the rest of the high street in adult clothing. In Womenswear the lead has increased to 14% on quality and fit. In Lingerie we have maintained our significant 35% lead on quality.

Customer returns for quality have continued to fall and are now at the lowest levels for 9 years.

We fit our garments on real people, to ensure consistency and relevance for the product's end use. We take into consideration the customer profile when designing our products from the easier fit Classic garments to the ranges aimed for the young at heart.

However, we recognise that we are far from perfect and that we can always do more and are continually striving to improve the quality of our clothing.

Our Customer Services Team are happy to deal with any specific issues you may have.

Does Marks & Spencer still have a public image problem in relation to some of its womenswear ranges?

A: The trading results speak for themselves, that our image is good in the eyes of the vast majority. Also according to various retail studies, our image has improved tremendously.

Will David Beckham's move to Real Madrid affect the DB07 brand or its name?

A: There are no plans to change, especially as I believe number 7 will still be David's number in the England team. It is a very successful range for us

Why are your fresh fruit and vegetables overpriced in relation to other local competition?

A: The products are not necessarily comparable, and we justify our prices with high standards of quality and freshness.

We audit our prices every month against all major supermarkets.

I think your work regarding food allergies, for example wheat-free, and on labelling is very good, but why are there are so few 'meal for one' options for people with allergies?
There is certainly a growing demand for meals for one, and we will certainly take note of your request.

Our decisions to proceed with certain items do depend on scale, on us being able to sell enough to make production viable. If there is demand, we will respond.

Could we have plain white kitchen towels?

A: This will fall within Vittorio's responsibility for Home and Kitchen and I'm sure he has plans for all our ranges.

Financial Services Why are your Euro Travellers Cheques difficult to cash in smaller banks abroad, in particular in Spain?
Thank you for your comments, which will be useful for us. I am not sure about that particular situation, but I think a solution would be to use the new Marks & Spencer credit and loyalty card, which you will be able to use anywhere in the world. That is probably a better and cheaper way than traveller's cheques, which have become less popular recently.

Will Marks & Spencer still offer ISAs after 2005?

A: It is currently our intention to do so.

My local store was chaotic during the post-Christmas sale, could I suggest a price-coding system would help people find what they want?

I must admit that a Christmas sale is not exactly the ideal time to visit a store, and this is probably also true for any other retailer, but I am sure we can do better. So thank you for your suggestion, which we will look at.

Will Marks & Spencer improve its trolley fleet, they all seem to have square wheels?

A: We will be looking at a revolutionary new trolley in our new Home concept store in February next year. Perhaps from that experience we will learn something of benefit for the business more broadly.

When will Weybridge Simply Food store open?

A: It will open in September.

Why do you still have a problem with long queues at tills?

A: It is not a question of having too few staff overall, but how we utilise our resources, and we are aware that customers are concerned to see more staff available.

We are currently undergoing a restructuring programme that will ensure we have enough sales advisors on the sales floor at the times our customers need them most.

Why do staff in my local store turn lights out and put trolleys in front of the doors before closing time, and why can't I find a manager when I want one?

These things shouldn't happen. I'm sure our Chief Executive will wish to follow them up with the specific stores, thank-you.

Do you think there is a danger that you will become too self-satisfied and stop listening to customers?

A: We have a very wide customer base and we try and take into account all our customers. We are aware we don't get it right all the time, but we are aiming for continuous improvement and like to think we satisfy most customers most of the time.

Do you have an ethical policy on sourcing?

A. Yes, we source products from over 80 countries, and only the best will get to Marks amp; Spencer. The best is not limited to the product itself. It also includes ethical standards such as the kind of people we employ, and the pay and practices our suppliers apply, wherever in the world.

What is your position on sourcing and labelling products from the occupied Palestine territories?

A. We try to get the best possible quality for the best possible price, and that has driven us to look for the best sources of supply all over the world, and we have absolutely no favouritism or discrimination in this.

In answer to your specific question, we are following strict legislation determined by the EU that tells us which countries are officially recognised in the world. In this particular case, the country of origin is Israel, but if that legislation was to change, then obviously we would be the first to implement that change.

We clearly label all our products with country of origin to enable customers to make informed decisions.

Could we have some clarification of the policy relating to directors' remuneration?

A. Business has performed well over last year with increase in Earnings Per Share of almost 40%.

Our success is dependent on the attraction and retention of high calibre individuals who can drive performance and secure new paths for growth.

We have a remuneration policy to pay our top management on what we call 'upper quartile', compared to our peer group of other companies.

50% of every executive potential pay package is performance related and dependent on tough financial measures and personal targets being met.

Shareholders are protected by the fact that reward is linked to performance and the delivery of business objectives, which creates shareholder value.

The company's philosophy is that all employees should be appropriately and competitively rewarded, in particular, for the delivery of superior performance.

All eligible directors are investing 100% of their bonuses into shares under the share matching plan, thus aligning their interests with those of shareholders.

Why is the AGM taking place at the same time as BT's?

A. It is pure coincidence. We have no control over BT's AGM.

Our AGMs are planned on a three year rolling programme so this date was booked several years ago.

Is there any provision in your service contracts for mitigation of damage in case of directors leaving?

A. All directors are on a one year rolling contract (except Vittorio Raddice who will be on one year at the end of his first year).

Vittorio began on a two year contract, which decreases by a month every month. He will, therefore, be on a one year contract at the end of his first year.

It is not something we have provided for, but something we can look into.

The Government have established a consultation paper on 'reward for failure' relating to directors remuneration, contracts, performance and severance, and we will review our practices against any further guidelines published by the DTI.

We received a number of questions regarding our proposed outsourcing of store related loss prevention, as follows:

A. We are outsourcing our store-based Loss Prevention resource to Securicor, entailing the transfer of approximately 200 employees. I believe we are the last of the major retailers in this country to take such a step.

We want to be the standard against which all others are measured in the core areas of our business. We recognise that in certain areas, as other retailers have done, whether it is in security or head office catering, we simply do not have the scale to do as good a job as we believe contractors can do for us.

Securicor is a leader in its field and can offer staff a career path and expert training as well as access to industry qualifications.

If this is an invitation for us to consider union representation at Marks & Spencer, then I have to decline the invitation simply because we respect what our employees want. If tomorrow the majority of our staff were to insist upon union representation, then obviously we would welcome that initiative. So far, virtually none of the 67,000 staff at Marks & Spencer are interested in joining a union. I think that they are well represented today, through the Business Involvement Groups, where we have an ongoing dialogue with our staff. These are democratically elected, and so they are a fair representation of our staff. We have no need to create another layer of communication with our staff at this time.

Our employees are protected through a process of consultation in accordance with TUPE regulations. Our concern is to make sure that the best interests of those people and the business are handled as we complete that process.

A third party supplier with whom we want to operate should be fully aware of our employment contracts.

We have to be as efficient and productive as we possibly can, in order to serve our customers well. In some speciality areas, we do not have the scale ourselves to do as good a job as a well established, specialist contractor can.

We are currently in an ongoing dialogue with our employees to handle the transfer between ourselves and Securicor. A key element is protecting the interests of our employees.

Q. How safe are our pensions?

A. There is no risk to your pension as a former Marks & Spencer employee.

Many pension funds are in difficulty due to the performance of the equities markets.

Therefore we are bringing the required statutory actuarial valuation forward so we are able to deal with any deficit.

Why are your health insurers getting more stringent and refusing payments on tests for certain conditions?

A. Insurance companies have become more stringent in the kind of things they reimburse.

We haven't changed our policy and to the best of my knowledge have no intention of doing so. We will gladly look into specific instances for you.

There is a note on page 35 of the annual report. Health insurance relates to employees who retired prior to 1988

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