L.L.Bean announced its fiscal 2005 sales results as well as its intention to pay performance bonuses to employees. For the 2005 fiscal year ending February 26, 2006, L.L.Bean reported record annual net sales of $1.47 billion, a 4% increase over 2004. The company also announced that its Board of Directors approved a cash award of 8% of annual pay to eligible employees.
“L.L.Beans Board of Directors voted unanimously to approve a well deserved employee bonus,” said Leon Gorman, L.L.Beans Chairman of the Board. “2005 was challenging for all retailers and yet L.L.Bean posted very solid results. We have a solid growth strategy in place, and once again we are pleased to be in the position of rewarding Bean people for their achievements.”
Chris McCormick, L.L.Beans President and CEO, expanded upon the challenges and rewards of 2005. “We made impressive strides and grew the business in the face of significant challenges,” he said. “The repercussions of major world events such as Hurricane Katrina and their role in rising energy costs and consumer confidence in general created a lot of uncertainty for all retailers. In response to these conditions we implemented marketing contingencies that included an unconditional free shipping promotion in November and December. While very risky and rather costly, it turned out to be a risk worth taking,” he added.
“I have communicated to employees that I am very proud of all that was accomplished in 2005,” he continued. “On our way to servicing yet another record selling season at Christmas, we also managed to implement major changes including systems logic upgrades and opening a new contact center in Bangor. For the first time in December we also saw e-commerce emerge as our dominant sales channel, set numerous records in operations and added a record number of new customers to our list of buyers.
2006 and beyond
Last month L.L.Bean announced several new developments that will unfold in 2006. Among them, the company announced plans to open 5 new stores over the next 18 months in the states of Massachusetts, Pennsylvania and Connecticut. The company also has plans to expand operations in its hometown of Freeport Maine, including a 330,000 square foot expansion to its distribution operation; property acquisition on Main Street that will enable a revamp of its retail campus; and the intent to use property it owns elsewhere in town to build a parking garage and 100,000 square feet of non-L.L.Bean retail space. “We have a lot of irons in the fire, but thats a good place to be,” said McCormick. “New stores outside Maine and expansion of our distribution operations in Freeport are now a certainty, and other developments are likely to follow. No doubt we will be faced with new challenges in the year ahead, but its an exciting time to be at L.L.Bean.
Bonuses and bonus eligibility
L.L.Beans Board of Directors approved the 8% bonus to cover 4,700 eligible employees. Any employee who worked a minimum of one thousand hours in the 2005 calendar year and who was actively employed through December 2005 will receive the performance bonus. Bonus disbursements to employees will be made on Friday, March 24, 2006.
2005 L.L.Bean Year in Review
- 2005 company net sales a record $1.47 billion a 4% increase over 2004 net sales of $1.41 billion.
- E-commerce grew 28% and for the first time ever emerged as the companys dominant sales channel in the month of December.
- 2005 was the single largest year ever for new customer acquisition (the prior record was set in 2004).
- Audited 6 year net sales history (in billions):
- 2000: $1.17
- 2001: $1.2
- 2002: $1.17
- 2003: $1.3
- 2004: $1.41
- 2005: $1.47
- In 2005, L.L.Bean contributed $2.8 million toward conservation, recreation, health & human services, education and the arts.
- A privately held company, L.L.Bean does not publicly disclose financials.
Founded in 1912 by Leon Leonwood Bean, L.L.Bean Inc. began as a one-room operation selling a single product, the Maine Hunting Shoe. In 1967 L.L.s grandson, Leon Gorman, took over as company president and led the company's transition to becoming the preeminent outdoor retail company it is today. With the company's modern day success as his legacy, Mr. Gorman assumed the role of Chairman of the Board in 2001, passing company leadership to Chris McCormick, the first non-family member ever to hold the position.
While its business has grown and changed significantly over the years, L.L. Bean still upholds the values of its founder and continues his dedication to quality, customer service and a love of the outdoors. In the past 5 years L.L.Bean has donated over $6.3 million toward conservation and land stewardship. The 120,000 sq. ft. L.L. Bean Retail Store in Freeport, ME, is open 24 hours a day, 365 days a year and welcomes more than 3 million visitors every year.