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Friday July 27 12:13 AM EDT, By Catherine Valenti

Known for its traditional, tailored clothing, Brooks Brothers is on the block amid some changing trends in businesswear. Plus, what's

the latest clothing trend in the workplace? ; Brooks Brothers, that venerable institution of conservative, buttoned-down fashion, is on the block - and the big question for the retailer is how its next owner will guide it through the fickle byways of fashion.

Founded in 1818 by Henry Sands Brooks in New York City, Brooks Brothers has become synonymous with the corporate business look.

Under its current owner, British retailer Marks & Spencer, the clothing store has updated its offerings in response to the move toward business casual in the workplace, but many observers say those efforts are falling short.

Marks & Spencer recently announced plans to sell Brooks Brothers in its effort to focus on the U.K. market, with more than 20 companies

showing interest in buying the retailer, though reportedly at a much lower price than the British chain originally paid.

Tough Competition

Various reports say the British retailer may only get around $500 million for Brooks Brothers, much less than the $750 million the company paid for the retailer in 1988. A spokesman for the company would not comment on the status of the sale. "They paid for too much for it, and it failed to live up to its expectations," says Nick Bubb, an analyst who covers Marks & Spencer for Societe General in London.

Others agree that Brooks Brothers needs to go further in its efforts to capture a younger, less conservative consumer. "They're trying to capture a whole new market and they have a lot of competition in that market," says Virginia Hebert, associate professor at Johnson & Wales University's college of business. "They had a market that was all theirs, and now they're competing with the Gap and J. Crew."

Makeover Needed

Known primarily for its tailored menswear, Brooks Brothers in recent years has added more casual clothing along with a line of clothes and accessories for women. Some of Brooks' offerings for this summer included bright red Capri pants and sleeveless shirts for women. Even leather pants were found on the stores' racks last winter.

Some Brooks Bros. Innovations

These efforts to appeal to the younger, hipper set have been met with mixed results. For the year ended March 31, Brooks sales volume

increased only 3.2 percent from the previous year, with same store sales rising 1.8 percent. Brooks' sales in 2000 rose 10.1 percent from 1999.

In comparison, Gap Inc. , which includes Banana Republic, the Gap and Old Navy saw its sales for the fiscal year ended Jan. 27 rise

18 percent. Same store sales for the chains, however, were down. "There's always room for the traditional item, but I don't know if they

had extended out enough to pick up a younger market," notes Gayle Marco, associate professor of marketing at Robert Morris College in

Pittsburgh.

The End of Business Casual?

Hebert agrees. She thinks Brooks Brothers needs to update its tailored looks with the streamlined, more European-looking designs that have made chains like Banana Republic such a success with the young business crowd. "It has to be an updated, sleeker but still conservative look," says Hebert.

Buyer to the Rescue

That could change if the right buyer takes the challenge. Though various reports say retailers like May Department Stores and Polo Ralph Lauren are in the running for Brooks Brothers, a spokesman for Marks & Spencer would not confirm who the bidders are. A spokeswoman for Ralph Lauren would not comment on the sale, while a May spokeswoman did not return a call for comment before deadline.

"We're very encouraged by the level of interest in the companies that have come forward," says Marks & Spencer spokesman Louis Hill, who notes that the bidders have been narrowed down to a short list of less than 10 companies. Style isn't the only challenge that faces Brooks Brothers. The downturn in the economy has sapped consumers' enthusiasm for buying new wardrobes. Retail sales of apparel have been slipping this year as consumers have grown more cautious.

But despite these challenges, market watchers say with the right owner--and maybe even the return of formal dressing the workplace - Brooks Brothers could eke out its niche once again. "The U.S. franchise may appear to be tired and over the hill, but it's probably a strong brand that can be turned around," says Bubb.