Number
49
L.L. Bean
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The term “Yankee ingenuity” may be a cliche today, but it truly meant something back in the time of Leon Leonwood Bean. Just past the turn of the last century, the man everyone called L.L. was an avid outdoorsman who spent his time roaming the Maine backwoods. Then, as now, the Pine Tree State was notable for its rugged terrain and abundant precipitation. According to legend, L.L. favored a pair of heavy leather woodsman’s boots as he tramped around the spruce-fir forests. He did not, however, appreciate the way they left his feet wet and sore. And so one day, when he returned to his home in Freeport, he decided to do something about it.
Working with a local cobbler, L.L. created an alternative style of footwear that addressed these personal concerns. His new boot combined a waterproof rubber bottom with a lightweight leather top, and it immediately caught the attention of friends and associates. As innovative at marketing as he was at design, Bean decided to offer them for sale through the mail. He quickly received orders for 100 pairs. When stitching problems led 90 customers to seek returns, L.L. cheerfully refunded all their money and set out to make a better model.
Both the mail-order sales approach and 100-percent satisfaction guarantee stood Bean well as he expanded his operation over the years. To this day, in fact, the company that carries his name is one of the best-known and most successful directmail retailers in the United States. (It now sells more than $1 billion in outdoor products each year and still fully guarantees each one.) A flagship store on Main Street in downtown Freeport, open 24 hours every day, nicely complements the company’s more than 50 different catalogs. It has even become one of the state’s top attractions by drawing more than 3.5 million visitors annually. And, in a bow to modern times that L.L. could never have envisioned, the company also offers its inventory and outdoors-oriented advice on a Web site that’s been justifiably praised for its informative content and user-friendly design.
Those rubber-and-leather boots that old Leon Leonwood Bean initially put together, dubbed the Maine Hunting Shoe, have since mushroomed into a wideranging gear and clothing empire. But L.L.’s thoughtfulness in design and philosophy toward customers hasn’t changed any more during the intervening years than his precious Maine woods.
While it now sells more than 16,000 different products through catalogs, its Freeport headquarters, nine factory outlets in the United States, and eight stores in Japan, L.L. Bean started much more modestly. Its founder initially intended to offer only his newfangled boots, and sell them exclusively through the mail. But so many customers began showing up at his workshop, he was forced to open a showroom in 1917. And their demands for additional items became so great, he soon added more footwear, a variety of sporting goods, and clothing such as the extra-thick, extra-soft cotton Leatherette Shirt. As the business grew, L.L. remained in complete control of every aspect from selecting products to writing catalog copy. He did still find time, though, to regularly slip into the backcountry to test new items and enjoy a little fishing.
L.L. eventually was joined in the business by his son, Warnie, who in 1934 designed the water-repellent and mildew-resistant Zipper Duffle Bag (which remains popular to this day). The company’s reputation grew rapidly through these and other well-made products. It was soon attracting celebrities—ranging from Eleanor Roosevelt to Babe Ruth. But the operation was still quite casual. It had a single telephone and only one cash register, and its cashier would spend her down time revising the mailing list and helping to repair hunting shoes. It took just three of the 60 employees to open all of the mail, and L.L. would stop to chat upon arrival each morning with anyone he encountered before boarding the freight elevator that he rode to his third-floor office. By 1951, so many customers were dropping by the store at odd hours on their way to hunt or fish that L.L. decided it should never be closed. It’s been open round-the-clock ever since.
When L.L. died in 1967 at age 94, his grandson Leon Gorman took over. Under his leadership, the company has spread its influence around the world and grown its customer base to 4.5 million. The main store was expanded to 109,000 square feet and an adjacent L.L. Kids Store was added. More than 450 people now work in the manufacturing plant alone, and 150 million catalogs focusing on specific seasons and individual sports are mailed annually. The lone phone of the early days is certainly no longer sufficient to handle all the traffic these generate. As many as 180,000 telephone orders are taken daily and some 3,300 people are employed to field them during peak periods. More than 11 million packages are shipped each year, and nearly 120,000 have gone out on a single day. And Freeport itself has grown impressively during this time: it is now a world-famous shopping outlet boasting over 100 other retailers and an array of lodges and motels that unfailingly advertise their proximity to the famous outdoor store.
L.L. Bean has been good to its employees, with a one-time cashier named Carlene Griffin even staying on board for more than 50 years. Such loyalty has been fostered in many ways, including a generous bonus program tied to annual sales. These bonuses reached a high of 18 percent of an employee’s salary in 1988, but dropped to half that in 1996 and were not distributed at all during the next two years as sales flattened. And those disappointing performances—attributed to everything from mild weather to declining business in Japan and Canada—were, unfortunately, just the tip of an iceberg that first became visible at the start of that decade.
Double-digit growth was the rule at Bean during the 1970s and 80s, as the outdoor and preppy looks it epitomized took hold. But trouble began brewing in the 90s. The average customer was approaching 50. The traditional styles it championed offered little that was new or exciting. And competition was heating up, with total catalog mailings from all sources in the United States mushrooming from 7.8 billion in 1982 to nearly 14 billion in 1998. Dozens upon dozens of these direct mailings competed for the attention of past and prospective Bean customers. Adversaries from the sporting goods world such as REI, as well as those from the fashion world such as The Gap, were closing in.
Despite promising to fight back, Gorman and his lieutenants were slow to respond to mounting threats. Believing their well-known brand was immune from the increasing onslaught, they initially refused to charge customers for shipping—even though everyone else did. The decision was seriously impacting their bottom line. (The company finally acquiesced in 1994, becoming the last major catalog retailer to do so.) They delayed the all-important move into children’s clothing and gear. And they declined to add new stores around the country. Revenues at the privately held firm took a corresponding hit, rising just 2.9 percent in 1997 after actually falling the year before.
By then, Gorman was fighting back aggressively. He altered the company’s longtime management structure to make it more responsive to changing times. He planned to open new stores, and updated the clothing they would offer. He authorized a hip new advertising campaign for electronic and print media that was designed to remake the company’s image. He initiated a new sub-brand, called L.L. Home, which showcased furniture and assorted products for bed and bath. He also spent $100,000 in 1995 to build a Web site that would help the company reach badly needed younger consumers and mitigate the devastating effects of ever-rising paper and postage costs. In less than a year—and at a time when the online world was still so new that relatively few people could access it—a million hits were recorded.
The site’s initial purpose was simply to tell everyone about the company, but its popularity soon spurred Gorman to move full-tilt into the unchartered world of e-commerce. And while it is unlikely that this cyber-catalog will ever completely replace the paper flyer started by L.L. to hawk his boots in 1912, the results have been very positive. (An organization called eMarketer rates it the number-two site among catalogers.) Virtually everything Bean offers for sale is available there—from Moorland Ragg Wool Sweaters and Vacationland Dome Tents to White Mountain Snowshoes and Swedish Folding Cots. There’s also a full selection of newer items, such as Adirondack Floral Sleeper Sofas, Goose Down Box-Stitch Comforters, and Forest Rim Stoneware. And there are extensive additional sections packed with expert advice on various outdoor sports, information on Bean’s on-site educational opportunities (covering bicycling, fly fishing, outdoor photography, and more), details on the company and its environmental commitments, and a park search that allows visitors to find facilities around the United States by location, activity or type.
While such electronic retailing and image refurbishing will undoubtedly prove critical to future success, it’s significant to note that Bean is also retaining the products and principles on which it was initially built. L.L.’s original Maine Hunting Shoe remains one of its most popular products, for instance, and the company is still governed by the philosophy that drove its founder: “Sell good merchandise at a reasonable price, treat your customers like human beings, and they will always come back for more.”