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E. S. P. Retail Showcase

Focus - Sports & Recreation

L.L. BEAN, L.L. KIDS,

L.L. BEAN FACTORY STORES

explores expansion opportunities

 

The famous Freeport, Maine manufacturer and retailer sells more than 16,000 outdoor products through catalogs and a downtown Freeport retail store. The company also has nine factory outlet stores in Maine, New Hampshire, Delaware, and Oregon and 16 stores in Japan. The company has initiated a new concept extension, L.L. Kids (see E.S.P.’s June 1999 issue). The company also runs L.L. Bean Outdoor Discovery Schools, offering lifestyle training that stimulates sales of its targeted line of goods. L.L. Bean launched it’s website in 1995 and in 1996 first offered e-commerce as an extension of its catalog sales. The site is located at www.llbean.com. The company’s manufacturing facility produced $57 million of L.L. Bean’s net sales in 1998. In support of its traditional mail order concept, L.L. Bean still produces 50 different catalogs per year. In fact, catalog sales offer precise demographics for the rollout of retail and factory outlets, an excellent and efficient expansion strategy.

L.L. Bean was founded in 1912 by Leon Leonwood Bean, a Maine outdoorsman who was tired of coming home with sore, wet feet from the heavy leather woodsman’s boots of his day.  He decided to invent a new kind of boot.  He created the “Bean Boot,” and his design and practical advantages were a kick to the britches.  He sold 100 “guaranteed” pairs to fellow sportsmen through the mail.  Unfortunately, 90 pairs were sent back when the stitching gave way. Mr. Bean, true to his word, refunded the money and started over.  The growing line of merchandise soon filled more and more pages. People would often drop by L.L. Beans’office in Freeport, Maine, so in 1917 he opened a showroom. In 1951, Bean announced, “We’ve thrown away the keys” and opened his retail store 24 hours a day, 365 days a year. In 1998, net sales approached $1.03 billion, with retail sales of $146 million and domestic and international catalog sales of $887 million.

 

Management:  Leon Gorman, a grandson of Leon Leonwood Bean, has been president since 1967.  Gorman has grown the company into one of the world’s leading international mail order companies.  Gorman enjoys the products and outdoors so much that he often tests products on his many outdoor endeavors.  For example, in 1990, L.L. Bean sponsored the International Peace Climb of Mount Everest, and Gorman made the climb.  He also climbed Mount Kilimanjaro using and testing L.L. Bean products. Two men – Bill Shea, vice president of retail stores, and John Walling, the director of factory stores – have been instrumental in extending the company’s retail reach during recent expansion.  In 1997, the company opened an extension of the original concept, a 17,000-sq.ft. L.L. Kids store, adjacent to the original Freeport store.  This extended concept store had close to 700,000 visitors in its first year. L.L. Bean Outdoor Discovery Schools, based out of the original store, offer instruction for the whole family and individuals on fly fishing, canoeing, bike repair, kayaking, and orienteering.  The classes are a main component of the Maine store and the company hopes to carry them over to future stores as the company expands its various outlets.

 

Expansion:  Retail Stores: L.L. Bean’s retail store is approximately 100,000 sq.ft. and is located on Main Street in Freeport, Maine.  After Arcadia National Park, the store is one of the most popular tourist destinations in Maine, with more than 3.5 million visitors annually.  For the first time in the company’s 87-year history, it is expanding its retail store concept.  A 75,000-sq.ft. site has been chosen in McLean, Virginia at Tyson Corner Center (metro Washington D.C.’s largest mall). Construction is planned to begin in fall 1999.  In the next three years, three to five more retail stores are planned for the Mid-Atlantic region.  The company seeks to locate near outdoor activities (fishing, hiking, camping, etc.).  Stores will range from 30,000 sq.ft. to 75,000 sq.ft. in malls, freestanding facilities, and specialty projects.   Average per-square-foot sales are $520.  The L.L.Kids concept will at be a department in the new retail venues.

 

Factory Stores: The company also has nine factory stores in Freeport, Portland and Ellsworth, Maine; Nashua, Concord and North Conway, New Hampshire; Rehoboth Beach, Delaware; and Lincoln City and Bend, Oregon; and 16 stores in Japan. Both retail and factory stores are due to be rolled out.  According to John Walling, director of factory stores, the company looks to go into outlet centers, value downtown areas, and/or tourist locations.  With the expansion of the retail stores, the factory stores will more or less follow the leader into a market.  Typical leases are five years with at least two options. Generally, the company does not sign for more than 10 years on the initial lease term. The company is fortunate in being able to produce its own built-in demographics reports based on the catalog sales.  Stores are 15,000 sq.ft. to 17,000 sq.ft. and average per-square-foot sales are $390-$400.  Enough tenant improvement money to make the operation turnkey is desired, but the company is flexible.  Expansion will be at a rate of approximately two openings per year thru 2001.

 

Parent Company:  L.L. Bean, Inc.

 

For more information, contact Bill Shea for retail stores and John Walling for factory stores at L.L. Bean, Casco Street, Freeport, Maine, 04033; 207-865-4100, Fax 207-552-2802.  Visit the company website at www.llbean.com