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* Q1 non-food like-for-like sales down 1.5 pct
* Clothing lfl sales down 0.6 pct, womenswear "up slightly"
* Food like-for-like sales up 1.7 pct
* Some shareholders criticise pace of turnaround plan
* Shares down 0.9 pct (recasts with comments from shareholder meeting)
By James Davey
LONDON, July 8 (Reuters) - Marks & Spencer's army ofsmall shareholders warned Chief Executive Marc Bolland they wererunning out of patience on Tuesday after the British retailerreported its 12th consecutive drop in quarterly generalmerchandise sales.
Bolland, CEO since 2010, has spent 2.3 billion pounds ($3.9billion) in three years to address decades of underinvestment atthe country's biggest clothing retailer, overseeing the redesignof products and stores and hiring a new clothing team.
But a trading update ahead of the annual shareholder meetingshowed first-quarter sales were hit by problems with its newwebsite, which sent online sales down 8.1 percent, and draggedclothing, footwear and homeware sales down 1.5 percent at shopsopen at least a year.
The problem with the website, while well-flagged, took theshine off a small rise in sales at Marks & Spencer's (M&S)flagship womenswear ranges and prompted questions about when theheavy investment would pay off. Shares in the group, which alsosells upmarket food, were down 0.9 percent by 1200 GMT.
"This must be the slowest turnaround of a ship in history,"one private shareholder told a packed investor meeting atLondon's Wembley Stadium complex. Another accused the group of alack of leadership, while a third said it had lost sight of thejob of a retailer - "producing goods that appeal to the public.
"Let us see some improvement, rather than recurrentexcuses," private shareholder John Farmer told the meeting.
With more than 750 shops across Britain and an estimated 24million customers passing through its doors every week, M&S hasamassed a large and often vocal minority of small shareholders.But it is the major institutions that will decide Bolland'sfuture and so far they have been prepared to give him more time.
Bolland's re-election as a director of the company wasbacked by 96 percent of shareholders who voted at the meeting,according to indicative poll results.
Chairman Robert Swannell accepted the general merchandisedivision had not come up to expectations but told shareholdersthey would soon see improvements from the 130-year-old group.
"We know we have to do more," he said. "We now have todeliver on the investment we've made."
STEP BY STEP
The new website, launched in February, is a pillar of M&S'sintended transformation into an international retailer reachingcustomers through stores, the internet, and mobile devices.
Shares in the group, which started as a market stall inLeeds in 1884, are down 4 percent since the start of this yearand down 42 percent since their peak in 2007. Privateshareholders own about 30 percent of the retailer's equity.
While analysts said trading in the 13 weeks to June 28showed some improvement, they added Bolland had much to do.
"It will still take a considerable amount of time for M&S todemonstrate that it can break the mould, grow its non-foodoffer, maintain market share and build earnings," said ShoreCapital's Clive Black, who has a "hold" stance on M&S stock.
A new clothing team set up in 2012 has so-far failed todeliver a sustained increase in sales and, for the first time,M&S earned less in the year to the end of March than itsfaster-growing rival Next.
M&S said like-for-like sales of non-food products, fell 1.5percent - in line with analysts' forecasts of down 1-2 percentbut worse than a decline of 0.6 percent in the fourth quarter ofM&S's 2013-14 financial year.
"We have seen a continued improvement in clothing, although,as anticipated, the settling in of the new M&S.com site has hadan impact on sales," said Bolland.
The firm said M&S.com sales fell 8.1 percent, though therehad recently been a gradual improvement in performance. It saidit expected the site to return to growth ahead of the peaktrading period of November and December.
Finance director Alan Stewart said the website and thefirm's new e-commerce distribution centre at Castle Donington incentral England were performing in line with internalexpectations. He said 3.2 million customers had registered forthe new site and it expected to get 6 million eventually.
M&S said that while like-for-like sales in womenswear werepositive, overall clothing sales fell 0.6 percent on the samebasis, reversing a 0.6 percent rise in the fourth quarter.
"We're actually very pleased," Bolland said, adding that therise in womenswear sales came despite fewer promotions.
"We believe that step-by-step we are on the right track," hesaid, adding "I'm really committed to what I'm doing."
M&S's food business, which contributes more than half ofgroup sales but less profit, is performing better and delivereda 19th straight quarter of growth. Like-for-like food sales rose1.7 percent, against analyst forecasts of up 1.5-2.5 percent anda fourth-quarter rise of 0.1 percent. The outcome was boosted bythe fall of Easter in M&S's first quarter this year.
($1 = 0.5877 British Pounds) (Editing by Kate Holton and Mark Potter)
