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M&S Shareholders' Anger Targets Bras, Dresses

Thursday, 10 Jul 2008 | 11:47 AM ET

Marks & Spencer's top dog Stuart Rose faced the wrath of investors at the company's AGM yesterday – but not necessarily for merging the roles of chairman and CEO or for profit warnings.

Rose dodged outrage at the lack of cotton dresses with sleeves in the summer ladies wear range. He ducked fury at one shareholder's discovery that her favorite bra was temporarily removed from production. And he was urged to mull the difference between the width of the feet of British women and women from other nations.

You may have expected the newly-anointed executive chairman to be called to account for the concentration of power in his new job or for last week's surprise profit warning.

But one of the few investors who did try to ask serious questions was actually slow-clapped by the shareholder audience until he gave up.

Marks & Sparks has an unusually high proportion of small investors -- accounting for about a quarter of the stock and with an average age (judging by the AGM) of well into the pensionable years.

And Rose seems to have an enduring appeal with that audience. He charmed the crowd with his offer to take the bra-complaint woman shopping, joshed that he has little experience of women's feet and mocked his own frequent spectacle changes.

Rose was unapologetic about the 5.3 percent drop in like-for-like UK sales. He insisted Marks is simply more switched on to current trading conditions than rivals, describing the company as an "early warning system or smoke detector" for the broader economy.

Considering that few of Marks' retail peers have been forced to issue profit warnings, it seems a bit rash to write off an out-and-out drop in sales by labeling yourself as a smoke detector.

But remember, this isn't the forum for professional investors. One portfolio manager, who did trudge through the rain to the Royal Festival Hall (and shall remain anonymous) described the company as a bag of... erm...

He said Rose is refusing to listen to the City and his insistence to combine the roles of chairman and CEO smacks of arrogance.

Rose happily pointed out in his address that he has been referred to as a "kitten strangler" and "the Robert Mugabe of retail" so presumably he's unfazed by the arrogant thing.

Anyway, the remuneration proposal was approved, Rose was re-appointed and the small investors had a great day out complete with all-you-can-eat lunch (courtesy of the flagging food division), unlimited wine and enough tea to sink the Armada. Everyone's happy. Almost...

Philip Green offered 400p a share for M&S in 2004. They reached a high of 759p in April 2007. They closed on Thursday at 240.25, 2.7%.

What will those institutional shareholders have to say to Rose behind closed doors?