Bean CEO presses for growth surge

Chris McCormick, who last May became the first non-family member to run L.L. Bean, says that the apparel cataloger has been “flat-lining” for too many years. He’s determined to shift Bean back in to a growth mode. “That’s our number-one priority,” McCormick said during his speech at the Annual Direct Marketing Association Catalog Council Networking Dinner, held in New York on April 25.

Offering a broad historical review of the Freeport, ME-based company while also taking a candid look at its present and future, McCormick said that he wants Bean to take a less understated approach to multichannel marketing to keep up with rivals such as Lands’ End, as well as with thriving discount retailers Target, Kohl’s, and Wal-Mart. He cited the discounters because he’s seeing a renewed emphasis on pricing. “We’ll maintain quality,” McCormick said, “but communicate value more.”

McCormick said that Bean needs to preserve and improve upon its greatest assets—quality merchandise and topnotch customer service—by doing more than “only whispering we have a better product. We’re going to invest more in brand development and will spend more this year in advertising and our product line. We have a great corporate culture, but we need more of a competitive spirit. For years, we’ve been myopic in Maine.”

Last year Bean’s sales grew just 2.7%, to $1.14 billion. The biggest challenge in revving up the company’s growth is to make Bean “more relevant to the market,” McCormick said.

But McCormick didn’t zero in on any one of Bean’s three marketing channels–print catalogs, the Web, and retail–as the key to the company’s growth. Nor did he suggest straying from its core customer base, whose average age is 51. “I want our image in the future to be the same, but broader than apparel and home goods,” he said. “Our products will always support hunting and fishing, but also maybe other areas.”

He compared Bean’s wholesome family image to that of Disney’s, while indicating that at least one way the company could break out of its recent sales slump is through Disney-like licensing deals. “We’ve been in discussions with Marriott,” McCormick said, without revealing specifics. “We’ll also do a lot more television advertising.”

McCormick believes that the company’s reorganization plan–which included the January elimination of 210 jobs and the recentralization of key functions such as marketing, merchandising, and inventory control—will help Bean reach its goals. The reorganization shifted departments from “silos with no one talking to one another to a structure where we’re integrating everything. That’s what Lands’ End is famous for,” he conceded, naming Bean’s Dodgeville, WI-based rival as the competitor he most admires.

As for his own company, McCormick remains bullish on Bean’s core catalog for its growth, pointing out that he decided to close the “marginally profitable” Freeport Studio women’s apparel title last fall because the book “had become a distraction to the core business.”

He noted that Bean’s average customer spends more than $400 with the company over the course of the year, placing four orders with an average order size of $100-$110. But Bean’s catalog growth won’t include a sudden blitz of catalog mailings. “We mailed 95 catalog [editions] last year,” he said. “That’s too many, and we’re going to fix that.” Bean mailed 213 million catalogs to 35 million households last year, with the company’s 10,000 best customers receiving 80 catalogs throughout the year. “We need to increase our voice, but once those customers receive their 78th, 79th, and 80th catalogs, those books are no longer effective.”

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