Paul Myners, the former Marks & Spencer chairman, has jumped to the defence of his close friend Sir Stuart Rose and said that there was nobody better to revive the retailer, despite its present problems.

Speaking before a possible revolt by institutional investors at tomorrow’s M&S annual meeting, Mr Myners said that he fully expected the 2,000 private shareholders due to attend to show their full support for the executive. He added: “Stuart is more likely to get it right than anyone else.”

The rallying call came as shares in M&S fell by a further 4 per cent to 217p, with analysts continuing to cut their forecasts after last week’s profit warning. The shares have tumbled 32 per cent in four days of trading and are close to their lowest since 1989.

About a quarter of the company’s institutional investors are expected either to abstain or to vote against Sir Stuart’s reelection at the AGM in protest over his recent promotion to executive chairman, a dual role that breaches corporate governance guidelines. However, Mr Myners said that he was convinced that the “grey army” of private shareholders, former employees and pensioners expected to flock to the AGM would back the man he helped to bring to M&S four years ago.

“The private shareholders are very loyal and have always shown good judgment and pragmatism,” Mr Myners said. “If you look at the messages they sent the company, they have consistently been right. They indicated their displeasure with the leadership of the company under Luc Vandevelde and Roger Holmes, they supported myself and they were unhappy with the way Kevin Lomax removed me. I think they will show considerable pragmatism again on Wednesday, when they will indicate their full support and show Stuart is the right person to lead this company.”

Mr Myners, who refused to comment on the opposition of institutional investors such as the Cooperative Insurance Society, said that the slump in sales at M&S was more reflective of the tough trading climate on the high street rather than any specific problems with the company. Phil Dorgan, a Panmure Gordon analyst, believed that it would take M&S a long time to regain market confidence. He said that a dividend cut appeared to be inevitable, given a likely slump in profits this year. “This would leave some egg on some faces, but we would expect Stuart Rose to listen and to act,” he said. “We would expect him to don ‘takeover mode’ and to see major changes over the next six months.”

Meanwhile, M&S is set to close its shops in Taiwan just 14 months after their launch, according to a report last night. Three stores are understood to be shutting down after a joint venture with local retailer President Chain Store failed to take off.

Boardroom shuffle

June 2004 Paul Myners becomes “stop-gap” chairman at M&S and hires Sir Stuart Rose as his chief executive

May 2005 Kevin Lomax, senior nonexecutive director at M&S, leads campaign to block Mr Myners from staying on permanently, believing he and Sir Stuart have become too close

July 2006 Mr Myners eventually steps down, to be replaced by Lord Burns. Mr Lomax is replaced by Sir David Michels

March 2008 M&S reveals that Sir Stuart is to become executive chairman in June as part of a deal that keeps him in place until 2011

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