M&S chief lays on the charm

Mr Vandevelde prepares to meet his public

Marks & Spencer chairman Luc Vandevelde tried hard to convince shareholders that he is capable of turning the troubled retailer around.

Take heart, profits and value will return when we return to what we do best

Luc Vandevelde

At a sometimes stormy annual general meeting at London's Royal Festival Hall, Mr Vandevelde told them: "The task was tougher than I expected, so it's going to take longer than I expected."

He said the retailer had to appeal to its core market and return to its traditional emphasis on quality and value, and he blamed the media for exaggerating its problems.

"Take heart, profits and value will return when we return to what we do best," he said.

Angry

The shareholders were particularly angry at proposals to double the value of executive share options from 1.5 times annual salary to three times annual salary.

There were calls of "rubbish" as Mr Vandevelde explained the difficulties of retaining staff, and he faced a barrage of questions from the floor about the controversial scheme.

Non-executive director, Dame Stella Rimmington, the former head of MI5, was called on to explain in detail how share options worked - and that people would not gain access to shares until the share price had doubled.

She said the options were needed to encourage staff to "do the best job and work all the hours God sends."

Mr Vandevelde had specifically asked to be excluded from the enhanced scheme, she said.

But the shareholders' anger was barely diminished.

An amendment approving the new options package was voted through by more than 85% - thanks largely to the proxy votes of big institutional investors - but nearly half of the 2,500 shareholders in the hall voted against it.

'Back to basics'

On the product front, Mr Vandevelde was keen to signal a "back to basics" approach.

Asked by a shareholder in his twenties what M&S would do for his age group, he said that the retailer had to win back its core 35-55-year-old age group.

From the autumn, he said, these customers will be able to buy more "classic" products, signposting a return to the middle market.

He also announced plans to make navigating around stores easier, including clearer indications of which where one section ends and another begins.

Hostile mood

The mood of shareholders going into the meeting had been distinctly hostile.

This is the first time we have ever come to a shareholders meeting, but we felt we had to try to help and get rid of this Luc

M&S shareholder

"He (Vandevelde) has not done us any favours," said one gentleman in a tweed suit, who said he had been a shareholder for 50 years. "He is not a retailer."

Another said: "I would have preferred the directors to have turn the company around before claiming their bonuses."

Three former M&S workers, with nearly 80 years' service between them, felt the retailer had lost touch with its customers - and no longer listened to its staff.

"This is the first time we have ever come to a shareholders meeting, but we felt we had to try to help and get rid of this Luc," one said.

Winning ways

But Mr Vandevelde's approach appeared to go down well with the majority of shareholders, many of whom are retired M&S workers and have had the company's shares in their family since before the Second World War.

Vandevelde: A practised charmer

He also won points for his charm.

When one shareholder, Barbara Jackson of Epping, asked to loud applause how many of the firm's 14 directors were wearing M&S clothes at the meeting, Mr Vandevelde and 11 of his colleagues stood up.

After the two-hour meeting, most shareholders left the hall in a better mood than when they went in - and not just because of the complimentary pack of M&S sandwiches and other goodies they were given.

He had a lot of charisma

Shareholder

Comments from female shareholders included "I think he was wonderful", and "He had a lot of charisma."

Rita Peters, whose family has owned M&S shares since the 1940s, said: "There is no doubt he is a charmer. I think he performed very well in the circumstances.

"But I think it will take years to turn the company around."

'Nest egg'

Not everyone was convinced.

When we bought the shares we thought they were like the Bank of England

Shareholder

One woman said: "They should ask people what they want in stores. As a pensioner I am entitled to a 20% discount, but half the time I can't find anything to buy."

"I was looking forward to nice little nest egg in my retirement - but now it seems the shares are not going to be worth as much," another woman added.

"When we bought them we thought they were like the Bank of England, but now we would probably be better off with shares in other companies as well."