The boss of Marks & Spencer has left open the possibility of more store closures after saying its current plans to shut 110 stores are “not finite”.
Chief executive Steve Rowe said its portfolio of legacy stores was “holding it back” as he spoke to shareholders at the company’s annual general meeting.
Chairman Archie Norman added it is now paying the price for “not shutting stores 10 or 20 years ago”.
The company is in the midst of a major overhaul, which includes plans to close 85 full-line stores and around 25 Simply Food outlets as it looks to return to sustainable profit growth.
The chairman said the restructuring would stabilise the firm as it looks to direct resources elsewhere in the business, including online growth, as it seeks to double the size of its food business.
Mr Rowe said the company is on the right track but needs to iron out “wobbles” in its business, which included selling out of popular jeans and “some of the worst availability I’d seen in 30 years” earlier this year.
He said M&S is on target to meet its £350 million savings targets through axing “old-fashioned stores”.
Mr Norman added the company would speak to store staff more as part of the company’s attempts to deliver future growth.
He said: “Somewhere along the line, the organisation we inherited became slow, unaccountable and lost the voice of the stores.
“If we hear the voice of the stores, we will grow.”
The retailer’s board received a broadly positive reception from shareholders, who appeared to largely back its transformation plans.
Nevertheless, it received criticism from one shareholder over the company’s decision to reduce its dividend and its recent decline in share price.
Mr Norman responded: “I’ve always said this is a five-year programme and the most important thing is to get on with the job and hopefully in years to come we will get back to paying an increased dividend.”
This year, the company’s entire workforce missed out on their annual bonuses after failing to hit performance targets.
Mr Rowe is among the thousands of staff who missed the payout as it pushes forward with its turnaround plans.
Despite missing out on the bonus, his total pay packet for the year jumped by 48% to £1.7 million, compared with £1.1 million a year earlier.
It is understood that, according to proxy votes, his annual pay deal was approved by shareholders along with the meeting’s 20 other motions.
Despite holding back the bonus from all staff this year, the retailer’s board decided to give Mr Rowe a £24,500 pay rise to his basic salary of £810,000 – although the company pointed out he has not received a basic pay rise since 2016.
The company also faced questioning from investors on its recent joint venture with online retail technology business Ocado .
It secured a £750 million deal to buy half of Ocado’s UK retail business earlier this year but some retail analysts have raised concerns over the move.
M&S received shareholder support for the deal after an 85.1% take-up for its £600 million investor cash-call to finance the deal.
In May, the company said underlying pre-tax profits fell 9.9% to £523.2 million for the year to March 30, down 9.9% from £580.9 million the previous year.