L.L. Bean Holiday Sales Weak; Plans Layoffs

The holiday sales decline will result in annual revenues being down for only the third time since 1960. McCormick further said that the company doesn't expect the situation to improve after the new year.

“It appears that the Grinch has stolen a substantial piece of Christmas,” McCormick wrote. “To say this financial performance is disappointing is certainly an understatement, but to focus on these results without considering the broader economic picture, would be only part of the story.”

L.L. Bean will offer voluntary retirement incentives and will open only two of the eight stores it had previously planned to open in 2009. The layoffs will mark the first such action taken by L.L. Bean since the company's 2000/2001 fiscal year.

“Even with these options on the table, it is now unlikely that we will be able to avoid some level of involuntary position elimination both to support our multichannel transformation, and to resize ourselves for a smaller revenue base,” McCormick wrote.  “Decisions will be made through the budget process in January and February and communicated once this process is complete.”

McCormick's memo also indicated that it is “increasingly unlikely that [L.L. Bean] will be able to pay a discretionary bonus” this year. Still, McCormick said the company is well positioned to ride out the difficult climate.

“L.L. Bean is operating essentially debt-free – which in this economy is quite an accomplishment, and insulates us, somewhat, from the turbulent credit markets,” McCormick noted in the e-mail to employees. “Through conservative financial management over the years, we have the financial capacity to withstand a significant downturn like we are seeing.”