L.L. Bean is considering a company restructuring, cost cutting and layoffs to deal with a double-digit drop in sales over the holiday period. In an e-mail to employees first obtained by the Times Record newspaper in Maine, Chris McCormick, president and chief executive, said the Freeport-based catalog retailer expected to miss its holiday sales target by 10% percent or more.


 


McCormick further said that the company doesn't expect the situation to improve in 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 plans to offer voluntary retirement incentives and to open only two of eight previously planned new stores in the new year but still sees layoffs.


 


“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.”


 


The last time L.L. Bean laid off workers was in the company's 2000-2001 fiscal year.


 


McCormick's memo also indicated that it's “increasingly unlikely that we will be able to pay a discretionary bonus” this year.


 


After the close of 2007, its 5,000 year-round employees received a payout totaling about $18.5 million. Sales in 2007 jumped 5.5% to $1.62 billion from $1.54 billion.


 


L.L. Bean had anticipated flat sales this holiday amid aggressive marketing efforts, including a $10 gift card with a purchase of $50 or more. Because of the double-digit holiday declines, annual revenues will be down for only the third time since 1960. The company also had reduced the seasonal work force at its call centers, retail locations and distribution center by 23%.



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. Through conservative financial management over the years, we have the financial capacity to withstand a significant downturn like we are seeing,” the e-mail read.


Despite the slowed expansion plans, plans continue for a theme park-style adventure center to be built on a 700-acre parcel owned by the outdoors outfitter in Freeport, about a mile from its flagship store.