Despite a disappointing holiday season for many retailers, L.L. Bean Inc. of Freeport, Maine, had its best December ever, but the strong month may not be enough to avoid downsizing in a “deflationary retail market.”
“We are very pleased with holiday results,” chief executive Chris McCormick said yesterday.
Spokesman Rich Donaldson added that the “strong double-digit performance” in December contrasted with flat December sales in recent years. The privately held company cited a cold winter, pent-up demand for its apparel and gear, and a free-shipping offer as reasons for the strong showing.
L.L. Bean has had several years of flat sales, and 2002 sales are still “running slightly below” 2001 levels, but Bean expects an “on-budget or better profit performance” when its books close at the end of February. In 2001, sales were $1.14 billion, with its catalogs and its Web site generating just under 80 percent of the total.
McCormick said that perhaps the most significant challenge is “the price deflationary retail market in which we find ourselves.”
Looking to improve performance, the company has sought to improve productivity, increase marketing investments, and cut costs. In November, L.L. Bean announced a voluntary retirement incentive that about 200 employees accepted. According to its Web site, Bean has 4,500 “year-round” employees. “The number of additional job reductions expected as part of Bean’s previously announced plans for 2003 have not yet been determined,” the company stated. “L.L. Bean remains in the midst of its 2003 budgeting process and will use the next several weeks to determine how many additional positions will be eliminated.”
A few years ago, the company looked to accelerate sales by opening mid-Atlantic stores. The belief was that consumers outside New England thought of L.L. Bean strictly as a retailer for Maine winters. Bean looked to become more familiar to non-New Englanders and show it’s a merchant for all seasons.
