Marks and Spencer is set to take a grilling from shareholders over whether it has made a meaningful recovery from the cyber attack which wiped out nearly a third of its profit.
The FTSE 100 retailer will face investors at its annual general meeting on Tuesday, where it will expect to be quizzed on whether it has fixed the foundations of its fashion arm, and whether its grocery business can maintain its rapid growth.
The company was hit by a cyber attack in April last year which shut down its website for 12 weeks and left some shelves empty.
Chairman Archie Norman described the incident as “traumatic” and the firm revealed in May that it chose to slash bonuses for every single member of staff in a bid to shore up its finances.
M&S saw its profit slump by 29 per cent to £365m in the year to March despite growing revenue, as it took a £131m hit from the incident.
Board ‘to face scrutiny’ over cyber attack
The retailer’s chief executive Stuart Machin told The Times earlier this year that the company’s board will suspend bonuses for each of its 63,000 staff, including himself and Norman.
Machin said the decision was taken in the wake of the 2025 cyber attack which crashed the retailer’s website for 12 weeks and left some shelves empty.
“I was part of this decision and I think it’s the right one. It does not, however, take away from the fact that everyone worked harder than ever during a very challenging period and I am very grateful to them for doing so,” the chief executive said.
Duncan Ferris, an analyst at investment platform Freetrade, told City AM that the retailer’s top brass will be expected to demonstrate that lessons have been learned and that the business has strengthened resilience against future hacks.
“It’s fair to say the executive team may face scrutiny,” he said. The inclusion of board members in the freeze on bonuses shows “some contrition,” he added, but investors “will want to know this accountability has been paired with decisive action”.
Announcing the firm’s full year results in May, Machin said his company had endured a “year of two halves,” in which the retailer got back on its feet during the closing months of its reporting period.
The online blackout caused by the cyber attack meant that M&S’ fashion arm was the worst affected, and analysts told City AM that shareholders will seek assurance that this part of the business has been overhauled rather than simply patched up.
M&S under pressure to win back customers
Dan Coatsworth, head of markets at stock broker AJ Bell, said that rival fashion retailer Next “pinched” a large number of customers from M&S while it was suffering from stock shortfalls caused by the incident.
“Investors will want to know what’s being done to win these customers back. Next has really upped its game with clothing and M&S might find its recovery efforts are going to take longer than previously expected,” he said.
Sales at the retailer’s fashion, home and beauty arm declined by nearly eight per cent in the year to March due to “the temporary pause in online trading and systems access”.
The buoyant performance of M&S Food had softened the blow of the retailer’s struggling fashion arm, as sales jumped seven per cent to £9.7bn amid million-pound investments in warehouse infrastructure.
Food is now the company’s “core strength”, accounting for more than half of its revenue, and shareholders will want proof that this business “can keep growing volume,” retail analyst Nicholas Found told City AM.
M&S is set to face scrutiny over its decision to allow board member bonuses to be delivered entirely in cash, rather than in 50 per cent shares.
Institutional Shareholder Services (ISS), a leading shareholder advisory, told investors that it has concerns over the “regressive” move, though it recommended that stakeholders back M&S’ remuneration policy.
In 2023, M&S came under fire after telling its shareholders to join its annual meeting online, meaning they were set to miss out on tea and biscuits and the chance to meet board members face-to-face.
Shares in M&S have jumped more than 16 per cent in the year so far and closed flat at 381p on Monday.
