Key changes

4,390 jobs slashed Non-UK stores scrapped US stores for sale 75p per share dividend promised �250-�300m restructuring costs New image for UK stores

It is to close all its European stores, which saw sales rise last year, and sell its US operations. The changes are intended to allow it to speed up a revamp of its struggling UK stores.

Chairman Luc Vandevelde told the BBC that the overhaul would affect 5,000 jobs, the vast majority of which are in continental Europe.

In the official statement, M&S says jobs directly hit by the changes total 4,390, with 1,040 in the UK, although "other reviews are underway".

The changes follow a wide-reaching review of the business by M&S's new managing director, Roger Holmes, in an attempt to reverse the company's declining popularity.

Back to basics

The plans include expanding product areas such as food, homewares and beauty. There will also be more in-store coffee shops.

Luc Vandevelde denies the overhaul is a panic measure

"The changes will make us completely focused on traditional customers in the UK," M&S chairman Luc Vandevelde told BBC Radio 4's Today Programme.

Mr Vandevelde has given himself until the end of this year to begin the turnaround in the store's fortunes, but denied that the restructuring was a "panic measure".

The company said that as a result of the closure and sale of overseas stores, it intended to return �2bn to long-suffering shareholders by the end of next March.

Share relief

M&S shares up 6% to 266.25p Highest since June 2000 �2bn handback to shareholders Equivalent to 75p per share

In addition to the sale of US stores King Super Markets and Brooks Brothers, it will franchise its business in Hong Kong and sell half of its property portfolio.

The move to scrap European stores comes despite the fact that year to date sales figures for continental European sales have risen 3.5%, compared to a drop of 1% in UK sales.

The wholly-owned stores in Western Europe will be closed, but the franchised stores in other countries around the world including Abu Dhabi, Hong Kong, Thailand and Eastern Europe will survive.

The Republic of Ireland is the exception to the rule, with its four stores opening their doors to business as normal.

Backtracks on designers?

In the UK, customers can expect to see the refurbishment of two-thirds of stores this year, the closure of the Direct catalogue business, 50 new beauty shops and 30 new coffee shops.

And Manchester shoppers will find their city centre store is being shared with competing retailer Selfridges.

Global sales, 51 weeks to 24 March compared to previous year.

UK -1% Europe (excl UK) +3.5% Americas +6.1% Far East +4.3% Total +4.6%

In what appears to be a U-turn, the firm also said it would return to exclusively selling its own brands, in order to "guarantee customers the quality, value and service they have come to expect".

Last year it proudly unveiled its Autograph designer collection in order to improve its image and entice a higher class of customer.

But the innovation has yet to prove a success, with it criticised for being pricey yet lacking the exclusivity of a designer brand.

The company has already introduced a number of measures to revamp its tarnished image, but none have delivered the desired turnaround.

Advertising campaign

George Davies, who successfully built up clothing chain Next and the George range of clothing at Asda, was hired earlier this year to launch a new womenswear collection.

Last Autumn the company launched its first TV advertising campaign, which it hoped would alert people to the fact that M&S wanted to change, but has so far failed to attract people back.

More coffee shops are on the agenda

The retailer recently announced more disastrous sales figures - with its core clothes sales falling about 10% over the Christmas period.

And the latest trading figures show clothing and footwear declining by 6.5% in the nine weeks to 24 March, although food and home furnishings showed strong growth over the previous year.

By Thursday's close, shares in M&S had risen more than 7%, from 249p to a nine-month high of 266.5p.