Marks & Spencer's annual general meeting is always a well attended affair, as its army of private shareholders turning out en masse to enjoy the free lunch and gripe about recent purchases. But another weak trading update gave them more cause for complaint than usual this week, as group sales slipped 0.7 per cent in its first quarter. We wouldn't necessarily agree with one angry shareholder's assessment of chief executive Marc Bolland as "the Bob Diamond of retail", but his strategy since joining 18 months ago hasn't yet justified his hefty salary.
Soggy first quarter trading was largely the result of a sharp slowdown in general merchandising, where like-for-like sales underperformed a weak market by slipping by a worse than expected 6.8 per cent. To be fair to M&S, it couldn't do much about the wettest April and June on record, which prompted a surge in promotional activity as retailers sought to shift summer stock. And M&S won't be the only one suffering, given the British Retail Consortium's observation that a short term Jubilee boost fizzled out quickly.
But M&S also acknowledged problems of its own making, in particular a continuation of the stock shortages in key womenswear items first highlighted back in April. The buying error appears to have hastened the departure of general merchandising head Kate Bostock, who will leave "by mutual consent" in October to be replaced by current head of food John Dixon and a new part time 'style director', former Debenhams, Jaeger and Aquascutum boss Belinda Earl.
After press speculation linking Ms Bostock to jobs at rival retailers including Asos and New Look, the news isn't a huge surprise. But analysts speculate that her manoeuvres towards the exit have exacerbated M&S's struggles. "It is hard not to think that 'the Kate Bostock situation' has been internally disruptive to a degree and may be linked with the apparent lack of confidence in the Buying team about backing their 'winners' this Spring/Summer season", said veteran retail watcher Nick Bubb, who believes that the management reshuffle may not actually do much to reverse the downward trend given the presence of nimbler competitors nipping at its heels. These include online fashion retailer Asos, which grew its UK sales by 8 per cent in the same period.
