London Letter: The only thing the City likes more than a bitter boardroom coup is a full-blown contested takeover bid. Fist fights in the boardroom provide huge amounts of entertainment while takeovers, particularly ones that are unsolicited and unwelcome, provide both entertainment and lots of fees.

With Marks & Spencer, we have been treated to both a coup and a bid.

The amounts of money generated by the upcoming battle between M&S and flamboyant entrepreneur Philip Green will be eye watering.

Five banks, led by HBOS, are financing Green's £10 billion (€15 billion) bid, while Citigroup, Morgan Stanley and Cazenove are advisers to the company and will organise its defence. Who gets paid what will depend on who wins. Given how much is at stake - there is probably more than £100 million up for grabs by the various bankers and advisers - I would not be surprised if events take an ugly turn. Indeed, on Monday a number of executives were fired.

Ever since it lost its role as supplier of underwear to the nation, M&S has been struggling. Changes at the top arrested the decline for a while but the fate of the latest crop of executives was sealed when chief executive Roger Holmes admitted last week that the company's recovery had "faltered".

Although we don't have full details yet about the precise nature of Mr Green's plans, it seems the successful retailer is essentially going to use a variant of the private equity model to reshape M&S.

Private equity companies typically spot fundamentally sound quoted businesses that have been mismanaged by the current team of executives, buy the company on the cheap (mostly using borrowed money), fire the underperforming managers and turn the company around using a top management team. It can be a little more complex but this is generally what happens in most buy-out cases. Ultimately, the private equity company hopes to make a fortune when the company is re-floated or sold on.

M&S has adopted a classic spoiling tactic and taken on board the strategy of its opponent. Firing the underperforming managers and installing a stronger team leaves the potential acquirer with a much tougher task if he is to convince the City - and shareholders - that it is worth selling out.

If shareholders think that the new team will deliver at least as much as Mr Green can, there will be little incentive to agree to a takeover.

All of this begs the question of just why M&S, with its fabulous brand, was allowed to flounder for so long. Was it just a case of inferior management? In terms of the big names on British high streets there are other stories about big winners and fallen idols.

Tesco, once a derided pile-them-high retailer, is now the undisputed number one destination for food shoppers and, increasingly, much else besides. Sainsbury, by contrast, has done an M&S. For all sorts of reasons, Sainsbury, is now a rather unfashionable place to shop.

There are plenty of theories about the key to successful retailing. But there does not appear to be an obvious magic formula - otherwise, why do we have such big winners and losers? M&S has been criticised for allowing its clothing range to become unfashionable. But beyond these sorts of vague criticisms there is not much else of any substance.

Broadly speaking, Sainsbury and Tesco sell the same sorts of goods at the same sorts of prices so why does one company go out of fashion?

I think the answer to all of this is contained in that one word: fashion. The creation of a successful brand is something that cannot be taught: it involves as much luck as it does judgment. And when your luck is out there is not much that can be done. Sure, Sainsbury and M&S management made mistakes, but I would guess that bad luck has played a large role in their demise.

If there is a formula for success in British retailing it would seem to involve making drastic change to the look of your stores as often as possible. Tesco does this a lot, while M&S and Sainsbury do it far less often. Shoppers seem to value a different retailing experience, even when buying the same stuff. To be fair to Tesco management, there are none better at cost control and the squeezing of suppliers.

M&S has shown that the old adage is true: brands are tough to acquire and easy to destroy. The upcoming bid battle is going to be far more fun than sorting out the next range of underwear.