Ax Falls on 300 L.L. Bean Workers

Despite double-digit sales increases in December, apparel and outdoor gear cataloger L.L. Bean announced that it will lay off as many as 300 staffers through April. In November, the Freeport, ME-based mailer had offered an enhanced early-retirement package to more than 500 employees. As of last month, roughly 200 workers had accepted the offer. L.L. Bean employs 4,300 year-round employees.

A shift in order volume from the telephone to the Internet and last year’s closure of the Freeport Studio women’s apparel catalog were factors in the decision to eliminate the jobs. But for the most part, the layoffs are “part of our continuing efforts to improve our efficiencies in the business and put us into position to market more aggressively and reinvest in the business,” says L.L. Bean spokesperson Rich Donaldson. “We’ve been working at taking the complexity out of the organization for the past couple of years; that runs the gamut from making merchandise decisions, such as how many items we want to develop, to deciding on how many catalogs we want to support.”

L.L. Bean will continue to invest in its Internet business, Donaldson says. “We’re also continuing to take a hard look at our product line, the assortment, and our prices,” he says, as overall declining prices in the retail apparel sector continue to put pressure Bean’s operating margins.

Bean’s spring 2003 catalog, for instance, features a number of callouts promoting lower prices, a trend “you can expect to continue,” Donaldson says, “because this is a price-competitive market. Through our various surveys and initiatives around managing costs, we’ve found that consumers are responding more to lower prices these days. We need to respond to that — not to make price reductions for all products, just those that meet consumers expectations around value.”

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Ax falls on 300 L.L. Bean workers

Despite double-digit sales increases in December, L.L. Bean announced that it will lay off as many as 300 staffers during the next two months.

In November, the apparel and outdoor gear cataloger had offered an enhanced early-retirement package to more than 500 employees. As of last month, roughly 200 workers had accepted the offer. L.L. Bean employs 4,300 year-round employees.

The laid-off employees will receive four weeks pay plus an additional week’s pay for each year of service with L.L. Bean. The job cuts are the result of the company’s streamlining efforts, which include automation systems that have reduced the volume of manual labor. A shift in order volume from the telephone to the Internet and last year’s closure of the Freeport Studio apparel catalog also contributed to the layoffs.

“This action is necessary if L.L. Bean is to remain competitive in today’s retail marketplace,” president/CEO Chris McCormack said in a company statement. “Declining prices, especially in the retail apparel sector, continue to put pressure on operating margins. Moreover, as we budget annual wage increases for the upcoming year, we also continue to be pressured by ever-increasing healthcare costs. While 2002 will be a solid year financially—a year, in fact, which will show improved results over 2001—we have set an even more challenging 2003 budget designed to position L.L Bean to perform in this highly competitive and price-deflationary retail environment.”

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3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Build the Foundation for Great Customer Experiences - NetSuite
Understand how consistent, timely, relevant and personalized experiences are enabled by having the right technology foundation in place.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.