L.L. Bean Moving Money Into Marketing
The last 20 months at L.L. Bean have confirmed one over-arching principle: Progress can be painful.
Faced with stagnant sales, too much inventory and stale creative, Chris McCormick, CEO of L.L. Bean, had to make some difficult and unpopular decisions if he wanted to whip the company into fighting shape for the 21st century.
He instituted numerous reorganizational initiatives that included eliminating 32 catalogs from the mail plan and 2,300 unproductive catalog pages. The staff cut 25 percent of its SKUs. Its vendor list was chopped in half after the company renegotiated nearly all major contracts, including printing, paper, e-mail fulfillment and data services. McCormick closed some of Bean’s physical plants, and he let go about 500 employees.
“The hardest thing a CEO has to do — ever — is eliminate jobs,” McCormick told the Portland Press Herald for a May 25, 2003, article on the company. “But when you come out of that tunnel and see the light and can be in a position to plan efficiently, it’s great.”
That said, however, the training season is far from over for this Freeport, ME-based merchant of apparel, footwear, home accessories, and outdoor and travel merchandise. But the company does appear leaner, more focused and better positioned to go the distance in today’s highly competitive marketplace.
The Rebuilding Plan
One of McCormick’s main priorities has been to move money from infrastructure to the marketplace. Specifically, the plan called for investing in technologies to help improve operating efficiencies, and in prospecting and advertising to grow its market.
One message Steve Fuller, vice president of marketing, wanted to make clear in his new advertising campaigns was Bean’s continued commitment to product quality and value. So television and space ads now tout the company’s reduced product prices and remind customers and prospects that the merchant stands behind its offerings with a money-back guarantee.