Last Thursday, managers of Marks and Spencer–which prides itself on its practical, no-nonsense products at sensible, no-nonsense prices–announced plans to close its 38 European stores, scrap its mail-order service and sell its major U.S. holdings.

The move has put 4,390 jobs at risk in Europe and Britain and left uncertain the future of Brooks Brothers, the standard bearer for conservative American apparel. Marks and Spencer bought Brooks for a costly $750 million in 1998. Today, analysts put its value at between $290 million and $360 million.

Several big-name retailers, including Saks, Neiman Marcus, Ralph Lauren and May Department Stores, have been mentioned as possible buyers for Brooks, but a spokesman for Marks and Spencer told NEWSWEEK that it hadn’t yet found a new owner. “Brooks Brothers stores will remain open until we find a buyer,” she says.

Marks and Spencer hopes its downsizing will allow it to refocus on returning its 298 British stores to their former glory as a national institution synonymous with quality, service and value. “We have always been very much a U.K.-orientated business,” says company spokesman Louis Hill. “We want to get that back on track.”

For those outside Britain, the sudden announcement came as a shock. In France, home to 18 of M&S’s 38 European stores, many staff members heard their fate on the news before leaving for work Thursday morning. “When I arrived, the store was closed, and everyone was crying,” says Shehnaz Abbas, a deputy supervisor who has worked at the M&S store on rue Haussmann in Paris for more than 10 years. “It’s a disaster, we don’t believe it,” she says.

Two French trade unions share her view. This week, CGT and Force Ouvriere launched a legal action against Marks and Spencer for allegedly flouting French labor laws requiring that company representatives be warned before announcements concerning major changes are made. A Marks and Spencer spokesman in Paris said the company “has respected all legal procedures for the announcement.” (The French chain Galeries Lafayette has since said it may be interested in buying the M&S properties in France.)

So why did Marks and Spencer see its profits drop by 50 percent–to $808 million–between 1998 and 2000?

Part of the problem lies with the chain’s dowdy image. “It’s a bit old-fashioned,” says Kay Foster, a shopper at its Oxford Street store in London. “Although I do buy the odd pair of knickers [underpants].” The clothes “are for old people, like my mum,” says Lisa Bird, 17, who prefers to shop at trendier British chains like Next.

Drab store interiors and old-fashioned business practices-the store only began accepting credit cards a year ago-also fueled the chain’s image as a relic from the past.

Consumers started to object to the stores’ style some two years ago, when 50-year-old shareholder Teresa Vanneck-Surplice complained at a 1999 annual meeting that Marks and Spencer’s underwear had “got too boring.” The response: applause from the 2,500 shareholders at the meeting.

Marks and Spencer executives began a makeover soon after. Lingerie designer Joe Corre was hired in November 1999 to give a racier look to the store’s trademark five-packs of plain, white cotton briefs. An Autograph Designer Collection, promising affordable, “exciting catwalk looks” was also introduced as an alternative to frumpy fashions. Twelve months ago, the chain’s 72-year-old clothing label, St. Michael, was replaced by the Marks and Spencer logo for a stronger brand identity. The old green shopping bags and staff uniforms were revitalized, and dull interiors of selected stores were given a facelift.

Last fall, the company’s first-ever TV ad featured a naked size-16 model–the equivalent of a U.S. size 12–running up a hill shouting “I’m normal.” The rising panty lines and suggestive ad campaigns grabbed headlines but not shoppers: clothing sales dropped 5.4 percent between March 2000 and March 2001.

The company is now aiming its upcoming range at “our classic customer,” says store spokesman Hill. That’s an over-45 woman “who is looking for good quality staples for her wardrobe such as tweed jackets and navy blazers.” But will that satisfy trendy teens and their fashion-conscious moms?