British retailer Marks & Spencer posted an eighth consecutive quarterly fall in underlying sales of clothing, piling pressure on management to deliver a swift turnaround when new ranges start hitting the shops later this month.
Marc Bolland, CEO since 2010, is pinning his hopes on a new clothing strategy based on more stylish and higher-quality garments.
But he drew criticism from shareholders at the company's annual meeting on Tuesday for taking home a bonus in 2012-13 that rose 25 percent to 829,000 pounds ($1.24 million) despite a second straight year of falling profit.
"Every pound of the bonus that was allocated to Marc and the team ... was wholly justified," Chairman Robert Swannell told the 1,133 investors who gathered at London's Wembley Stadium.
Some 95.5 percent of investors backed Bolland's re-election as a director and 91.9 percent backed the M&S pay report.
Autumn/winter ranges were unveiled in May by Bolland's new general merchandise team, led by former M&S food boss John Dixon, and received mostly positive reviews from analysts and the fashion press. That sent M&S shares, which have also been buoyed by bouts of bid speculation, to a five-year high.
The new collections will start to arrive in stores and online from July 25 with a full launch and main advertising push in September.
Investors have said there could be pressure for Bolland to go if the new autumn ranges do not set the tills ringing.
They will want to see signs of a pick-up when M&S updates on second-quarter sales on Nov. 5, while a much improved Christmas trading performance is imperative for the Dutchman's survival.
"Investors will be looking for an upturn in general merchandise sales by the end of the year. The new clothes collection was applauded by the fashion magazines, but the key thing is if the collection sells," one of M&S's top 10 investors told Reuters on condition of anonymity.
Bolland again cautioned the market not to expect too much, too soon, telling reporters: "We've always said that this will be a step-by-step approach."
WAITING GAME
Some of M&S's army of, mainly grey haired, private shareholders are losing patience.
"Over two years wars are won and lost, so just how long are we supposed to wait until we see results?," asked M&S investor Jeffrey Juddlestone at the meeting.
Swannell appealed for management to be given time to carry out what he called Britain's biggest retail transformation.
"We're not here for a popularity contest ... We will do it right and get it right and that I think is what you pay us to do, even if there is some short term pain," he said.
The 129-year-old group, which serves 21 million customers a week from 766 British stores, said sales of non-food products, spanning clothing, footwear and homewares, at stores open over a year fell 1.6 percent in the 13 weeks to June 29.
That compared with analyst forecasts for a fall of 0.2 percent to 3.0 percent and a decline of 3.8 percent in the fourth quarter of the 2012-13 financial year.
"Despite challenging trading conditions and further intensification of promotional activity in the market we saw some improvements over the quarter," said Bolland, though he noted market share did dip slightly.
Shares in M&S, up 45 percent over the last year, were down 1.5 percent at 1510 GMT, valuing the firm at about 7.4 billion pounds ($11.1 billion).
Sales data for the first quarter will be the last to fully reflect garments purchased by the previous buying team.
Though the first quarter outcome represented M&S's best non-food performance since the same period in 2011, when like-for-like sales were flat, the firm did benefit from easy comparative numbers, as in the first quarter of its last financial year like-for-like sales had slumped 6.8 percent.
Sales rose 1.8 percent at M&S's food business, which contributes over half of group sales, versus forecasts for a rise of 1.0 percent to 2.0 percent and an increase of 4.0 percent in the previous quarter.
The slowdown in growth there reflected Easter falling in M&S's first quarter in 2012 but in its fourth quarter in 2013 making comparative numbers much tougher.
