With sales down by at least 10% for the year, Freeport, ME-based L.L. Bean has started trimming its workforce. On Oct. 24 the $1.14 billion apparel and sporting goods cataloger offered about 500 of its 4,300 employees a voluntary-retirement package.
But Bean spokesperson Rich Donaldson notes that the early-retirement program is only the “first step” of Bean’s downsizing process. “We had hoped over a longer period of time to cut staff through attrition,” he says. “But it’s going to be hard to avoid layoffs next year, because the manner in which business has gone this year has brought this to a head sooner than we would have liked.”
Although he wouldn’t reveal specific sales figures, Donaldson says that Bean has failed to meet projections of flat sales compared to fall 2001. Bean reduced catalog circulation “slightly” this year, although the company will still mail 200 million catalogs throughout 2002.
Bean has just started its 2003 budgeting process, which won’t be finalized until January. “Once we see the response to this voluntary retirement in conjunction with the budgeting process, we’ll determine what our staffing needs are going to be,” Donaldson says. “It’s unlikely that budgeting targets can be met without impacting staffing levels.”
To be eligible for early retirement, employees must be more than 55 years old and have at least five years of continuous service with the cataloger. The package includes a month’s severance pay and a 25% increase in the regular pension plan benefit.