Vandevelde hints at further job cuts at M&S

Marks & Spencer warned of further jobs cuts at its Baker Street headquarters yesterday as the struggling retail giant reported yet another set of disappointing trading figures. The company added that trading would remain "tough for the foreseeable future".

Marks & Spencer warned of further jobs cuts at its Baker Street headquarters yesterday as the struggling retail giant reported yet another set of disappointing trading figures. The company added that trading would remain "tough for the foreseeable future".

Addressing 1,600 shareholders at the company's annual meeting at London's Royal Festival Hall, M&S chairman, Luc Vandevelde indicated that more job cuts may be necessary. "There are possible further economies or efficiencies to be gained at Baker Street and in any other parts of the business," he said.

The comments came as the company said UK sales in the 16 weeks to 15 July were up by just 0.9 per cent on an underlying basis. This compares with growth of 2.1 per cent when the company last issued figures in May. Food has been the biggest casualty with sales now up by just 1.8 per cent on a like-for-like basis. General merchandise, including clothing, is up by just 0.3 per cent. "It is pretty unimpressive," said Nick Bubb, retail analyst at SG Securities. "What happened to the wonderful spring ranges they were talking about a few months ago?" Other analysts pointed out that the figures are even worse if the weak comparisons of last year are taken into account. This time last year underlying sales were down by 10 per cent in food and 18 per cent in clothing.

Mr Vandevelde admitted as much saying: "The sales in the first quarter showed no more than a stabilisation. Growth is not adequate but the decline has bottomed out." As part of the group's recovery plan, the new chairman, who joined M&S in February, outlined plans to redesign a further 20 stores following a successful trial of stores in Fosse Park, Leicester and Sutton, Surrey.

He also proposed a new share option plan which will see directors receive shares worth up to two times their base salary in the first year of the scheme, with up to 1.5 times salary in the next four years. Half the grant will depend on the company's earnings per share rising by inflation plus 3 per cent. The other half depend on earnings rising by inflation plus 4 per cent.

Mr Vandevelde then had to face an hour and half of mostly hostile questions from disgruntled shareholders. Topics ranged from anger over executive pay, to concern over inside leg measurements on men's trousers. On executive pay, where all the main board directors received pay rises last year, Mr Vandevelde said it was importantto attract and retain the best people. But one shareholder asked: "You mention you are buying brains but they have failed. I blame largely the chief executive and ... would like to ask Peter Salsbury if he feels he is worth that extra amount." Mr Vandevelde intervened, saying he did not think Mr Salsbury should answer that question.

The shares fell 1.25p to 234.5p.