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Sales Slump At M&S Amid Staff Shake-Up

(c) Sky News 2012

Investors have voiced concern about Marks and Spencer (LSE: MKS.L - news) products during the company's annual general meeting, amid a quarterly slump in sales.

Complaints at the AGM included too many sleeveless dresses, grumbles about excessively loud music in stores and a claim that the firm's boss was the "Bob Diamond of retail".

As the company released figures of a 2.8% drop in like for like sales in the first quarter of 2012, small investors also grumbled about the so-called austerity AGM, where they were treated to a morning meeting followed by a doggie bag instead of the more traditional buffet spread of sandwiches and wine.

But the group's loyal small stakeholders, the majority of whom are well into their retirement years, still managed to take the board to task over more topical concerns such as executive pay and sliding sales.

However the group avoided a shareholder revolt as more than 95% of votes, including abstentions, backed the M&S remuneration report, despite concerns beforehand about a package that could land chief executive Marc Bolland with £6m when including bonuses and long-term incentives.

Held at the Royal Festival Hall in London's Southbank, the question-and-answer session was more subdued and orderly than in previous years.

One shareholder told chairman Robert Swannell that the board needed to bring in a "new era for ladies' clothing" with "more dresses with sleeves".

Mr Swannell said this concern had been previously raised and in the last year the number of sleeveless dresses on offer was cut from 300-plus to 173.

Amid some shock and applause, another shareholder added: "Your chief executive is the Bob Diamond of retail."

Veteran shareholder John Farmer condemned the company's "falling like-for-like sales and falling profits".

He said: "When are you going to get a move on and actually generate results in the form of positive return for shareholders?"

On Tuesday morning M&S reported a fall in non-food like for like sales of 6.8% and an overhaul of its key executives, including signing up an ex-Estee Lauder (NYSE: EL - news) group president to generate a strategic rethink.

The shake-up comes as some shareholders said remuneration had "reached obscene levels" and said the board needed "lessons in morality rather than greed".

But Steven Holliday, chairman of M&S's remuneration committee, said: "We're in the middle of a debate about what's competitive and what's fair.

I can give you an absolute assurance that we will independently keep up with best practice."

As the AGM came to a close, shareholders' thoughts turned to lunch.

Wendy Webb, from Weymouth in Dorset, a shareholder and former employee of M&S for 40 years, said: "It's disgraceful. Some of us have travelled a long way and all we get is a bag and a sandwich.

"What they used to do was nice, and we appreciated it - I fear for the future of M&S."