Marks and Spencer's reputation for taking things back was tested severely last summer when the item a small US shareholder wanted to change was the group's whole North American strategy. With less than $10,000 worth of M and S shares in American depository receipts, the Amalgamated Clothing and Textile Workers Union (ACTWU) was concerned about Brooks Brothers, the established US retailer of menswear for the leather brogue and Ivy League brigade.
By 1988, when M and S paid $700 million, for roughly 75 times earnings for Brooks, it was already well past its prime. As profits dropped by 75%, some of the ACTWU's 1,200 members at Brooks Brothers reported their alarm. An informal request by the union for a review of the North American strategy led nowhere; worse, the M and S accounts disguised the poor results from Brooks Brothers in the US by aggregating them with those of the profitable Japanese offshoot. Eventually the ACTWU decided to carry the battle across the Atlantic and call in London-based Pensions and Investment Research Consultants (PIRC).
While PIRC sifted through the M and S share register for the names of the top 50 shareholders, solicitors Stephenson Harwood worked on the legalities. Could the union put its case for action to preserve shareholder value to a selected number of its shareholders instead of the entire register?
Would PIRC holding proxies, be qualified to move amendments from the AGM floor?
The test never came. At the very last minute, clearly worried by this tenacious union, M and S contacted the union with the confidential news that a top level review of its North American policy had begun. The spirit of Paul Revere, it appears, lives on.