COMPANY MEETING

MARKS AND SPENCER, LIMITED

CONTINUED SUCCESS OF THE STORES MR. SIMON MARKS ON THE COMPANY'S FURTHER DEVELOPMENT INCREASING SEARCH FOR HIGHER QUALITY GOODS STAFF WELFARE

THE twelfth annual general meeting of Marks and Spencer, Limited, was held on May 31st last at Winchester House, Old Broad Street, London, E.C., Mr. Simon Marks (Chairman and Managing Direc- tor) presiding.

After referring to the sorrow and distress felt at the tragic death of Lord Milford Haven, a member of the Board, the Chairman, in the course of his speech, said :

ALLOCATION OF PROFITS

The Directors recommend the following allocations : To Staff Benevolent and Pensions Fund .. £25,000 Debenture Redemption Fund £11,760

Properties Contingency Reserve £64,598 General Reserve Account .. £324,730

Payment of a final dividend on the Ordinary and " A " Ordinary Shares at the rate of 271 per cent., thus making 42f per cent. for the year ended March 31st, 1938 .. Carry forward to next year's accounts .. £85,641

ISSUE ON BONUS TERMS

The Directors recommend that £174,730 from the General Reserve Account be capitalised, and that a distribution by way of bonus be made to the holders of the existing Ordinary and " A " Ordinary shares of the company in the proportion of one " A" Ordinary share for every ten Ordinary andfor " A " Ordinary shares held.

RESERVES

After making the proposed allocations and provision for the bonus shares, our General Reserve will stand at L2,000,000, the whole of which is invested in the business, and the proposed appro- priation to Properties Contingency Reserve will bring the amount of that fund up to. L265,000.

Freehold, Leasehold and Leased Properties stand at £7,994,598, showing a net increase of L715,003. The Furniture and Fixtures stand at £729,387, a net increase of £92,342, and the Stock-in-Trade at £1,505,802 is an increase of £326,661 over last year.

- The cash with the bankers and in hand stands at £872,139, a decrease of £620,087 compared with last year. Last year our Cash- in-Hand was swollen by the proceeds of the Debenture Issue which had then been only partially utilised for the development of the business.

CO-OPERATION WITH SUPPLIERS

Retail distribution is becoming more complicated and more exact- ing. The distributor must take into account new developments in technical processes and in materials at the production end, and must also follow the changing tastes, fashions, and needs of the consumer.

The greatest service that industry and the business sections of the community can render is to increase the public's purchasing power for the goods and the services which it needs. Our policy has been based on the view that there is still in this country a vast untapped market which we can reach only by the creation of better merchandise values.

Our search for higher quality goods within our present price range unceasing. This demands a close co-operation with the producer and an understanding of the joint problems involved. I have frequently stressed the importance which we attach to close collaboration with our suppliers, and have told you how through this association both parties derive substantial advantages.

In recent years we have found it necessary to advance one step further and to establish direct contact with the producers of the materials on which our manufacturers depend for their supplies. Jointly with them our Research Department examines the quality and durability of the cloths or materials • used by our manufacturers. .

The importance of ow direct contact with the producer of materials in this country can be gauged by the fact that the yardage used by our makers-up equals in quantity the amount of cotton piece goods exported to some of Lancashire's largest markets.

Our experience shows that modern methods of production, allied to the continuous and expanding rate of sales provided by our com- pany, result directly in a four-fold benefit : Firstly, in better value

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to the customers ; secondly, in an increased use of raw materials ; thirdly, in greater employment, and, lastly, in substantial improve- ments in the wages earned by the workers engaged.

DEVELOPMENT

In the past year we built z I new Stores (including one replacement) and enlarged 31 other Stores. We are now operating 228 Stores, and our programme for the current year embraces a 1 new Stores (including 3 replacements) and 4o extensions.

FINANCE

It has been the considered policy of your Board to finance a sub- stantial part of the development programme out of earnings.

The profits which we have earned during the past ten years, after making ample provision for depreciation and repairs and renewals, and after meeting interest on debentures and loans, have been dealt with as follows : Approximately 70 per cent. is accounted for by dividends paid in cash upon our share capital and by provision for Income Tax, and the balance of approximately 3o per cent. is repre- sented by sums carried to Free Reserves, part of which have, as you know, been applied in the issue of bonus shares from time to time.

Notwithstanding that we have every year increased the Ordinary share capital by the issue of bonus shares, the percentage rate of dividend has risen during the ten years from 15 to 42i per cent.

The funds now in hand will be sufficient to take care of part of our proposed immediate programme, but in order to secure the con- tinuity of development we have in mind, we have made the necessary arrangements for additional finance which will enable us to expand our business over the next two or three years.

WELFARE

The various services and benefits which have been provided for the staff cost the company in the past year nearly L250,000, including direct Welfare expenditure of approximately £too,000.

During the year we have put into operation an increased scale of wages for all grades, and have evolved a flexible wage system which takes account of age, length of service, and efficiency. We introduced the 48-hour week some years ago, and today our normal average working week is 46 hours. The holiday with pay, now much dis- cussed, has long been an established institution with us, and at Christmas every member of the staff receives a bonus.

The company attaches great importance to the general health of the staff. Hospital, dental, optical and medical services arc provided at nominal charges. Convalescent Home service is provided for those who require rest after serious illness.

As you are aware, there is in addition the Group Life Assurance and Pensions Fund, and also the Staff Benevolent Fund.

The Welfare Department organises and subsidises social and sports clubi, summer camps, and canteens where wholesome food is provided at a cheap cost. • The system of training which we have developed is steadily im- proving the service which we are able to put at the disposal of our customers.

The Board value very highly the co-operation and the loyalty of their staff of every grade, and I take this opportunity on your behalf, as well as on behalf of the Board, to place on record our thanks• to them.

Mr. Marks then moved the adoption of the report and accounts.

Mr. Israel M. Sieff, B. Com., Vice-Chairman, in seconding the resolution said : The merchandising principles which underlie our development policy have again justified themselves by the increased net earnings we are able to show for the last financial year.

As our Chairman has emphasised, we take great trouble to discover what our customers prefer_ In this connexion I would like to pay a tribute to the adaptability and to the progressive attitude of mind of the majority of British manufacturers who supply us.

The fact is that there are still many needs of our public which have to be satisfied. Through our Merchandise Development Department we believe we are finding the mechanism which will enable manufacturers to keep in closer contact with these untapped demands.

STAFF WELFARE

I would like to add one or two words to the observations made by the Chairman regarding our staff. The different steps we have taken, both in regard to the improvement of the conditions under which they are employed, and in regard to their welfare, are creating not only a more contented, but a more understanding, staff. Our sales staff is increasingly composed of a more easily trained type of sales- woman who is taking a deeper interest in her job. She is learning more about the way our goods are made and finished, and is able to impart useful information to the potential customer.

The fact that we are taking such a close interest in the health, welfare and working conditions of our staff, brings out in our em- ployees a ready response and a desire to develop a team spirit in the interests of our company.

I desire, also, to express my thanks to our staff for their loyal and devoted co-operation.

The resolution for the adoption of the report and accounts was carried unanimously.

A resolution was also passed approving the proposed capitalisation of reserves.

It was announced that Dividend Warrants and Letters of Allot- ment in respect of the bonus issue would be posted on June 3rd to those shareholders whose names were on the Register of Members on May 211d, 1938.